The U.S. economy shows signs of softening, raising concerns over potential recession risks, IMF Managing Director Kristalina Georgieva said during a Washington, D.C. event hosted by the Milken Institute. Georgieva noted that recent data indicates the U.S. economy has avoided a sharp downturn feared just six months ago. She credited the resilience to better policies, a flexible private sector, moderate import tariffs, and supportive financial conditions. “We see global growth slowing only slightly this year and next. All signs point to a world economy that has generally withstood acute strains from multiple shocks,” she said, previewing the IMF’s upcoming World Economic Outlook report. The remarks come as the U.S. continues to navigate a complex economic landscape. President Donald Trump’s trade policies and strict immigration measures have disrupted global trade, while rapid advancements in artificial intelligence are reshaping labor markets and technology. Georgieva said the U.S. tariff shock has been less severe than originally projected. The trade-weighted tariff rate now stands around 17.5 percent, down from 23 percent in April. Most countries have avoided imposing retaliatory tariffs. However, she warned that U.S. tariffs remain unpredictable. Inflation could rise if companies pass on tariff costs to consumers or if redirected global shipments trigger new tariff rounds. Financial markets are also showing signs of risk. Valuations are approaching levels last seen during the internet boom 25 years ago. Georgieva cautioned that a sudden market correction, similar to the dot-com crash of 2000, could slow global growth and hit developing nations hardest. The IMF chief emphasized the importance of addressing U.S. federal debt. With the debt-to-GDP ratio poised to surpass post-World War Two records, she urged “sustained action” to reduce national debt. Georgieva also recommended measures to encourage household savings, such as favorable retirement savings policies. “Buckle up. Uncertainty is the new normal and it is here to stay,” Georgieva said, highlighting the persistent risks facing the U.S. and global economies. The upcoming IMF-World Bank meetings will provide further insight into these economic risks. Analysts expect the report to discuss strategies for sustaining growth while managing inflation, debt, and trade tensions. Georgieva’s remarks underscore the delicate balance facing policymakers. While the U.S. economy has demonstrated resilience, tariff fluctuations, debt concerns, and volatile financial markets could combine to challenge growth in the months ahead. Experts say that close monitoring of fiscal policies, consumer spending, and international trade developments will be critical to avoid tipping the U.S. economy into recession.