IMF sees Fed in position to slash interest rates

The International Monetary Fund (IMF) said the Federal Reserve has scope to lower interest rates given the weakening US labor market.

However, the US central bank should move "cautiously" with a close eye on emerging economic data, IMF spokeswoman Julie Kozack said in a regular briefing.

"Our overall sense is that, given the downside risks to full employment, there is scope for the Fed to begin to lower policy rates," she was quoted as saying.

Kozack added, "We also would say that the Fed should proceed cautiously, of course in a data-dependent way, in the coming months."

According to Kozack, the US economy is showing signs of a slowdown, with local demand softening and the pace of new job openings decelerating, despite some upside risks for inflation due to the recently-introduced import tariffs.

She said a downward revision in US employment data announced earlier this week was a "bit larger" than the historical average, adding that IMF staff would review the data and revisions with US authorities during November’s scheduled economic review.