Fabio Natalucci explained some of the latest research from the International Monetary Fund’s World Economic Outlook and the Global Financial Stability Report.

He began with the Fund’s thoughts about the outlook for inflation, commenting on the state of the labour market and the deteriorating shift in inflation expectations, especially in financial markets. Asset price inflation is also a concern for the IMF. Fabio explained some of the modelling work which has been carried out on the housing market, warning of the not negligible risk of a dangerous collapse in prices in several countries.

Turning to the GFSR, one of its areas of concern is the challenge to monetary policy from increased risk-taking in financial markets and rising fragilities across non-bank financial institutions. One chapter of the report examined crypto currencies; the eco-system was explored, pointing to the lack of operational resilience and significant data gaps, which has led the IMF to propose enhanced regulation.

As COP26 is taking place, the GFSR team has examined an array of climate change risks, in particular the very large global investment requirements and hence the role of the financial sector to help with transition. In this regard, the IMF has set out its thoughts on how carbon taxes could assist with the adjustment process, whilst also considering the implications for inflation.

Fabio Natalucci is Deputy Director of the Monetary and Capital Markets Department with responsibility for global financial market monitoring and systemic risk assessment. Prior to joining the IMF, Fabio worked at the Federal Reserve Board, where he conducted research on the relationship between monetary policy, regulatory policy and financial stability. He has also worked at the US Department of Treasury, on regulatory cooperation in the G-20 and at the Financial Stability Board. Fabio holds a doctorate in Economics from New York University.

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