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Well earlier today -- -- claiming got a chance to sit down with IMF managing director Christine Lagarde discussing everything from the US recovery -- the -- reserve -- housing.
She began by discussing why the IMF downgraded their projections for US growth in 2013.
Take -- -- That -- recovery and but but recovery is much more stable and durable than we had seen before.
We full -- the US economy up one point nine and 2013.
And we believe that because of the housing market significant improvement in particular.
-- will be a more durable recovery.
-- Could be better.
And dead clearly the unemployment numbers on all these where they should be they should be lower -- thoughts.
And we see the the fiscal.
Policy the deficit cup -- I was being too how much on the economy.
The moment let me get to that unemployment rate right now about seven point 6% right just chipped up from April to may usage should be lower right now.
What great would you have expected it to be acting realistic for this moment in time.
-- what I'm saying is -- You know when when the US economy is.
Working -- full potential if you will.
No what -- about which is why it.
We are saying that while the recovery is underway.
It has to continue that it has to be of assistance in order to effectively.
Have a dent on unemployment.
In this IMF report you specifically say.
-- -- The sequester it was quote excessively rapid.
And ill designed to it exerts a heavy toll on growth in the short term and then he went on to say that it should be replaced with a back quoted mix of entitlement savings and new revenues.
We have at least in the United States in a way it felt like we dodged a bullet that the sequester wasn't as bad as everybody thought.
And yet you're worried about is there some other leg you see.
Downward on this and other shoe to drop with sequester in the second half of this year.
I think a lot of people -- both sick restoration was still designed and I think it -- put in place precisely to be avoided.
So what -- is saying now is slow down.
But hurry up.
What do I need -- -- business needs to come trucked.
The deficit by two and a half percent it's it's very heavy.
On the -- faith really in -- by about one point 5% may be a little bit more particularly if it if it picks up.
In his second and second quarter of 2013.
We also saying hurry -- Because there are long term measures that will be critical for the US economy.
That needs to be taken no deeply concerning entitlement.
The Fed of course has been -- a lot of liquidity into the system a lot of air into the system in the form of very low interest rates and of course this massive bond buying purchases.
Tapering everybody's wondering -- that will happen.
You say it'll extend through at least the end of this year when do you -- tapering begin you say you have met with the Federal Reserve and treasury.
For -- statement.
But you've just indicated to to the audience.
We know we have to make assumptions and our assumptions are not there would be a continuation.
Of that quantitative easing.
All of the Fed until the end of 2013.
We believe it was appropriate that it's been very helpful and we hope that it continues.
Until the end of 2013.
How popular -- -- of course.
Depending on circumstances some particularly if unemployment improves and if inflation is you know.
Slightly -- -- heading up a little bit then hopefully.
The monetary policy that has been put in place will gradually.
Unwind over time with good communication.
Christine Lagarde for the -- for their own Liz claimant.
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