IMF Deputy General Manager Gita Gopinath has reportedly warned that the US “hasn’t turned the corner yet” and that it’s too early for that federal reserve to announce victory in the fight against inflation.

in a (n interview to the Financial Times, Gopinath requested this federal reserve to continue raising interest rates this year despite a recent slowdown in headline inflation.

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“If you look at the indicators in the labor market and if you look at very stubborn components of inflation like service inflation, I think it’s clear that we haven’t gotten out of the inflation curve yet,” Gopinath said.

Labour market: One of the biggest concerns Gopinath has is the continued resilience of the US job market. Employment data released on Thursday showed that private sector employment rose 235,000 jobs in December and annual wages rose 7.3% year-on-year. At the same time, weekly jobless claims fell to 204,000.

As a result, major Wall Street indices closed over 1% lower on Thursday. That SPDR S&P 500 ETF Trust SPY closed 1.14% lower during the Vanguard Total Bond Market Index Fund ETF BND 0.11% lost.

Also the deputy of the IMF said it was important for the Federal Reserve to maintain a restrictive monetary policy until there was a “very significant, sustained” fall in inflation, reflected in wages and sectors unrelated to food or energy.

Gopinath also supported the central bank’s policy rate, which rose to around 5% and stayed there throughout the year.

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photo via IMF on Flickr