IMF lowers US 2014 GDP forecast to 2.0% from 2.8% prior (cites weather impacted Q1); maintains 2015 GDP forecast at 3%
- calls for Fed to maintain policy rates past mid 2015
- 2015 GDP should exceed potential, but 2% going forward as a result of aging population
- endorses increase in the US minimum wage, increase infrastructure spending and education; tax reform is necessary
- calls for tax credits for R&D to help growth; increase in gasoline tax; reform corporate taxes and perhaps launch a carbon tax and a federal VAT
- Sees potential for Fed to normalize rates faster assuming the Govt can push growth enhancing fiscal policies
- sees potential for financial markets to be complacent, with risks to financial stability possible rising for extended period of low rates