IMF chief concerned about high Japan and U.S. long-term rates
Kristalina Georgieva voiced concern that the 10-year Japanese government bond yield has reached its highest level in about 30 years.
International Monetary Fund Managing Director Kristalina Georgieva warned of high long-term interest rates in Japan and the United States during a speech in Singapore on Wednesday. The recent rate hikes by central banks in Japan, the U.S., and Europe were deemed "highly appropriate" by Georgieva, as she addressed the annual meetings of the IMF and the World Bank Group in Bangkok next week.
She expressed concern that the 10-year Japanese government bond yield has reached a 30-year high, and the U.S. 10-year Treasury yield has hit a 19-year peak, with both figures still rising. Georgieva attributed the rising rates to deteriorating fiscal conditions and mounting public debt, stating that the situation necessitates "an urgent and comprehensive set of policy responses."
She noted that the global energy price shock caused by Middle East turmoil is "large but contained," but warned that investment surges driven by artificial intelligence and soaring resource prices are contributing to inflation. Georgieva suggested that now might be an opportune moment for countries to adopt a "prudently hawkish" approach in their monetary policy.
Amid growing concerns over AI's rapidly advancing capabilities, she called for regulatory safeguards to manage AI's potential risks and harness its benefits. She highlighted that IMF research suggests AI could contribute up to a half percentage point of global growth annually annually if implemented correctly, advocating for international collaboration in this regard.
Written by urgent.news from Japan Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
