IMF urges Fed, central banks to monitor stimulus

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Associated Press

Posted on April 17, 2013 at 8:03 AM

Updated Wednesday, Apr 17 at 8:07 AM

WASHINGTON (AP) — The International Monetary Fund is urging the Federal Reserve and other central banks to closely monitor their extraordinary efforts to jump-start economic growth, warning that the policies could inflate asset bubbles and destabilize financial markets.

The global lending organization says the low-interest rate policies are providing "essential support" for economic growth and should continue. But it noted in a report on global stability that the policies could have "adverse side effects," including excessive corporate debt, a stock market bubble and risky investments by pension funds.

The fund says there are few signs of asset price bubbles yet.

The global stability report was released in advance of spring meetings of the IMF and World Bank in Washington this week.

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