U.S. should delay rate hikes until 2016, IMF says

The International Monetary Fund is downgrading its outlook for the U.S. economy this year and says the Federal Reserve should wait until the first half of 2016 to start raising short-term interest rates.

The IMF predicts the U.S. economy will grow 2.4 percent this year, down from its April forecast of 3.1 percent. It says America's "momentum was sapped" in recently by harsh winter weather and a strong dollar that has hurt U.S. exporters.

The economy, as measured by gross domestic product, contracted at a 0.7 percent annual rate in the first quarter.

Barring unexpected good news, the IMF urges the Fed to hold off until next year. Its key rate has stayed near zero since December 2008.

Many private economists expect the Fed to raise rates in September.