The International Monetary Fund warned Tuesday that upside risks to inflation have increased, calling into question the prospect of multiple Federal Reserve interest rate cuts this year. 

In its latest World Economic Outlook update, the IMF said “the momentum on global disinflation is slowing, signaling bumps along the path.” The rise in sequential inflation in the U.S. earlier in 2024 has put it behind other major economies in the quantitative easing path, the report said. 

The report comes as traders ramp up bets for a Fed rate cut in September. Per the CME Group’s FedWatch tool, Wall Street has priced in a 100% chance of lower rates at the Sept. 18 meeting. Traders also expect another rate decrease in November.

However, IMF chief economist Pierre-Olivier Gourinchas told CNBC’s “Squawk on the Street” on Tuesday that one rate cut from the Fed is most appropriate this year, highlighting still-stubborn services and wage inflation as complications to the path to lower inflation. 

Gourinchas said that while the robust wages and service inflation are “not necessarily a source of worry,” they are points of concern for the U.S. economy. His comments came after the U.S. Labor Department said the consumer price index grew last month at its slowest year-over-year pace since April 2021.

Despite the encouraging CPI report, Gourinchas stated the uptick in inflation earlier in the year indicates that the path toward lower inflation and rate cuts “could take a little bit longer than maybe the markets are expecting.” 

“We’re more in the camp that there could be some cuts in the latter part of the year but maybe just one, or 2024 and maybe the rest of 2025,” Gourinchas said. 

Across advanced economies globally, the IMF forecasts the rate of disinflation to slow in 2024 and 2025 due to broadly high service inflation and commodity prices. 

Concerning the U.S. economy, the financial institution lowered its growth outlook by 0.1 percentage point to 2.6% in 2024 on cooling consumption and slower-than-expected growth at the start of the year.