IMF MD Kristalina Georgiev Thinks Fed Isn't Done With Rate Hikes: 'We Are In An Exceptionally Uncertain Environment'

Kristalina Georgieva, Managing Director of the International Monetary Fund reportedly said the organization is yet to see any significant slowdown in lending and that the Federal Reserve may have to do more.

"We don't yet see a significant slowdown in lending. There is some, but not on the scale that would lead to the Fed stepping back," Georgieva told CNBC in Croatia. "I cannot stress enough that we are in an exceptionally uncertain environment. Therefore pay attention to trends and be agile, adjusting — should the trends change," she added.

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The absence of any significant slowdown in lending coupled with a resilient U.S. jobs report on Friday, could nudge the Fed to hike rates further, she indicated.

"The pressure that comes from incomes going up and in unemployment being still very, very low, means that the Fed will have to stay the course and perhaps in our view, they may need to do a little bit more," she said. The IMF MD also estimated that U.S. unemployment rate may beyond 4%, up to 4.5%, led by more interest rate hikes by the central bank.

Wall Street has so far remained busy focussing on the debt ceiling crisis with U.S. markets recording decent gains on Friday. The SPDR S&P 500 ETF Trust SPY closed 1.45% higher on Friday while the Invesco QQQ Trust Series 1 QQQ gained 0.75%. As the week commences, all eyes would now be trained on the Federal Reserve's policy meeting next week where investors will be watching out for the policy decision as well as the apex institution's future policy path.

Debt Ceiling: Speaking on the debt ceiling agreement, Georgieva said: "What has been agreed, in the context [that] it was agreed, is broadly speaking, a good outcome." "Where the problem lies is that repetitive debate around the debt ceiling, in our view, is not very helpful. There is space to rethink how to go about it," she added.

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