IMF: Federal Reserve should delay rate hike to 2016

The International Monetary Fund on Thursday called on the US Federal Reserve to put off its planned interest rate increase until 2016.

The Fed "should remain data-dependent and defer its first increase in policy rates until there are greater signs of wage or price inflation than are currently evident," the IMF said in a new report on the US economy.

The recommendation came as an IMF team cut its US growth forecast to 2.5 percent in an annual report on the economy, blaming the unexpected first-quarter downturn.

The Fed has been edging toward a rate hike as early as June or July, but the Fund said the US economy would not be ready for it until early next year.

"Based on the mission’s macroeconomic forecast, and barring upside surprises to growth and inflation, this would put lift-off into the first half of 2016."