Treasury counselor Zervos disputes IMF warning on U.S. debt path

David Zervos, newly named counselor to U.S. Treasury Secretary Scott Bessent, pushed back on October 15 against International Monetary Fund criticism of American fiscal policy, telling CNBC in emailed remarks that the fund's own projections had often been wrong.

Zervos, previously chief market strategist at Jefferies, pointed to a series of past IMF calls: a 3% world growth projection in 2008 ahead of a global contraction, optimism on Southeast Asia before the 1997 crisis, pessimism on Russia in 2022, and support for Argentina after a $57 billion rescue that preceded another default by 2020. He also cited the fund's view that U.S. inflation would prove temporary.

His comments followed remarks by IMF Managing Director Kristalina Georgieva on October 14 at the IMF and World Bank meetings in Bangkok, where she said robust U.S. growth alone would not stabilize the federal debt load, according to CNBC. Bessent had argued in August that the country could outgrow its rising debt-to-GDP ratio after government borrowing passed $40 trillion.

The Institute of International Finance said in a September report that short-term political fixes were squeezing public spending, with global debt above $365 trillion in the first half of the year.

This story was first reported by CNBC.