Why the IMF might be done and dusted… or not

It was a week ago that International Monetary Fund (IMF) head Kristalina Georgieva kicked off the Fund’s DC ‘spring meetings’ with an ominous note — “trade policy uncertainty is off the charts”. 

You could feel it in the DC air, with Intrigue sources confirming delegations from every corner of the globe were scrambling for meetings with Trump’s team while in town.

Or you could just read it in the Fund’s new data, pointing to: 

• A slower global growth forecast (from 3.3% to 2.8%)
• Slightly stickier inflation (revised back up by 0.1%)
• Greater odds of a US recession (now 37%, up from ~25%), and
• Slower growth in China (down to 4% from 5%).

Why? The Fund’s top French economist put it Frenchly bluntly: it’s “the abrupt increase in tariffs”.

But with the week now behind us, did the IMF achieve its mission of a) driving more cooperation, b) more trade and growth, and c) discouraging policies that harm prosperity?

Well, allow us to answer that with four quotes we’ve heard this week: two from the big multilaterals, one from the world’s largest economy, and one from the business world.

1. “We are entering a new era as the global economic system that has operated for the last 80 years is being reset”— Pierre-Olivier Gourinchas, IMF chief economist

That’ll seem obvious for any Intriguer, but for the IMF to lay it out so plainly with thousands of foreign officials there hoping to get a pulse on the markets? Wow.

But while France’s Gourinchas dropped the truth bombs, his boss (Bulgaria’s Georgieva) sprinkled some hope over the rubble, noting finance ministers must now return home and hit play on all the much-needed reforms they’ve been putting off.

2. “The Bretton Woods institutions must step back from their sprawling and unfocused agendas, which have stifled their ability to deliver on their core mandates” – Scott Bessent, US treasury secretary

Just a day after the IMF unveiled its gloomy outlook, Bessent appeared at DC’s Institute of International Finance and argued the IMF and the World Bank suffer from mission creep (he cited climate change, for example, inviting some pushback from Georgieva).

Of course, that made headlines as further evidence the US is ditching multilateralism. But the bit that didn’t make headlines came a few moments later in Bessent’s speech, when he flagged that the US wants to “expand its leadership role” in the IMF and World Bank.

3. “With the policy volatility, you actually undermine the very goal you’re trying to achieve” — Ken Griffin, Citadel founder 

While various CEOs in town continued to toe a Trump-friendly line this week, some like Griffin seemed bolder (at least compared to his cautious vibes during the campaign).

Still, off-stage, business leaders told Intrigue they understand Trump’s vision to bulk up US industry and rebalance its trade ties — and many believe he’s now gotten the hint about the need to make that shift without whiplashing the markets.

4.  “What I have seen this week is really a whole collection of the impossible becoming possible” – Kristalina Georgieva, IMF managing director

Wrapping up onstage with ministers from Argentina, the UK, and Germany, the IMF chief was still channelling her inner Oprah (dishing out positivity, not a Prius).

For example, all four VIP panellists were in furious agreement around one buzzword – “deregulation”. Whether it’s the UK loosening its climate policy, Germany somehow ditching its debt brake, or Argentina somehow stabilising its spending, all agreed on the need for governments to get out of the way. 

A thrilled Georgieva even offered all Germans in the audience a round of applause (not a Prius).

Intrigue’s Take

With all those vibes in DC, you’d be forgiven if you forgot the week’s official theme was actually ‘Jobs – The Path to Prosperity’. These events are planned months in advance, but nobody was really focused on jobs this week, other than as a by-product of the thing everyone was focused on: tariffs.

Still, the quote that most grabbed our attention was also the one probably most easily overshadowed: it was Bessent’s pledge for greater US leadership within the very Bretton Woods system (IMF, World Bank) it created in the afterglow of WWII.

It’s interesting because it gets at the heart of a dilemma still playing out on the world stage right now — as China’s economy kept growing through the 2000s, the US had to manage two competing priorities:

• Upholding the credibility of its own creations like the IMF, while also
• Competing with a rising and changing China.

The US, for example, supported doubling China’s IMF vote share way back in 2010 (credibility), but delayed its implementation for years (competition).

Of course, we’ve seen China’s counter-moves, too, pushing its own alternative institutions like the Asian Infrastructure Investment Bank and its beleaguered BRICS bank.

We mention all this because it encapsulates the same big tango that’ll shape our next century, as the US tries to thread between:

• The risk of blowback if it curbs China too hard, and
• The risk of losing if it concedes too much.