U.S. Treasury dismisses IMF debt warning and 'messy' forecasting

• Treasury counselor David Zervos told CNBC the IMF should examine its own forecasting record before criticizing U.S. fiscal policy.
• IMF Managing Director Kristalina Georgieva said economic growth alone would not reduce U.S. debt fast enough and called for fiscal measures.
• The exchange comes as U.S. debt exceeds $40 trillion and 10-year Treasury yields remain above 5%, intensifying scrutiny of the fiscal outlook.

David Zervos, Chief Market Strategist of Jefferies LLC, speaks during an interview with CNBC on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., September 3, 2025.Jeenah Moon | Reuters

The International Monetary Fund should check its own forecasting record before criticizing U.S. fiscal policy, David Zervos, newly appointed counselor to the Treasury Secretary, said on Thursday.

"When we see pieces on the IMF, it's good to remember how messy their forecasts have been in the past," Zervos said in emailed comments to CNBC.

The former Wall Street economist was responding to the IMF's Managing Director Kristalina Georgieva, who cautioned during the IMF-World Bank annual meetings in Bangkok on Wednesday that strong U.S. economic growth would not be sufficient to put mounting federal debt on a sustainable course.

Georgieva was herself responding to U.S. Treasury Secretary Scott Bessent, who told CNBC in August that the U.S. could "grow our way out" of a rising debt-to-GDP ratio, after government debt surpassed $40 trillion.

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Zervos, formerly chief market strategist at Jefferies, said Thursday: "In 2008, [the IMF's World Economic Outlook] had world growth at 3% and we had the first global contraction in post-world history a year later. We saw them positive on Southeast Asia in 1997 before the collapse."

"We saw them very negative on Russia in 2022, and Russia actually barely saw a blip down in growth before it started growing strongly. We saw them very positive on Argentina after their big bailout of $57 billion. And by 2020, Argentina was basically in default again. And the history books go on and on, whether it's Greece, whether it was the transitory call on inflation in the U.S."

"So take it all with a grain of salt," he added.

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Many economists warn that mounting U.S. interest payments and a high deficit have raised the risk of an unsustainable debt spiral. However, they are divided on whether the U.S. could be pushed into a true fiscal crisis.

The IMF's Georgieva has issued similar warnings to other big economies over the need for fiscal consolidation, telling CNBC on Oct. 7 that her message to France was: "Get your house in order."

Other economic institutions are also sounding the alarm over the rising cost of servicing global debt, which topped $365 trillion in the first half of the year. The Institute of International Finance argued in a September report that a "vicious cycle between elections and short-term quick fixes" to debt challenges was reducing the ability to spend money on public services.

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