In its annual health check of the US economy, the IMF also urged the US to boost the minimum wage, which is below most international standards, to fight poverty, which lingers above 15 per cent.
The IMF forecast economic growth of 2 per cent this year, below the 2.8 per cent rate it predicted in April, due to a weak first quarter. It kept its 2015 forecast unchanged at 3 per cent.
"Recent data ... suggest a meaningful rebound in activity is now underway and growth for the remainder of this year and 2015 should well exceed potential," the IMF said.
Yet the country's potential growth should only be around 2 per cent going forward, below historical averages, as the population ages and productivity growth slows, it added.
"Given the substantial economic slack in the economy, there is a strong case to provide continued policy support," the IMF said.
It said its forecasts show the US economy would only return to full employment by the end of 2017, with inflation remaining low, suggesting the Fed could keep rates at zero for longer than the middle of 2015.
The IMF urged
In the future,
A greater reliance on growth-enhancing fiscal policies could allow the Fed to retreat more quickly from its extraordinary monetary stimulus, it added.
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