The Head of the IMF, Christine Lagarde, has advised the US Federal Reserve to wait until the first half of next year before it begins to raise interest rates. The market has been anticipating the first rise in US rates since 2006, later this year.

The call came as the IMF reduced its forecast for US growth this year to 2.5 percent, down from its previous prediction of 3.1 percent. The OECD yesterday reduced its forecast of growth in the US this year to 2 percent.

“The US inflation rate is not progressing at a rate that would warrant, without risk, a rate hike in the next few months,” the IMF head declared at a press conference in Washington.

One of the key indicators of the health of the US economy, the monthly figure for non-farm payroll report is published for May later today. Economists are predicting jobs growth of 226,000 and an unemployment rate of 5.4 percent.

A rate hike in the US would ripple around the still close-to-stagnant global economy.

Speaking on May 22nd Federal Reserve chair Janet Yellen indicated that she believed that the US recovery could be strong enough to justify a rate hike - saying, “I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target.”