The International Monetary Fund sees U.S. consumer price inflation surpassing the Federal Reserve’s 2% target in 2017, one year ahead of the central bank’s own forecast.

In its latest update on the global economy, the international agency said consumer price inflation would reach 2.3% next year.

Also read: IMF cuts growth forecasts for U.S. and neighbors

In their latest projections released last month, Fed officials forecast that the personal consumption expenditure index, the central bank’s favorite measure of inflation, would not hit the 2% target until 2018.

The IMF said that the pickup of inflation would come from a “rapid easing of previous disinflationary forces — the dollar appreciation in 2015 and the drop in fuel prices — as well as well-anchored medium-term inflation expectations.”

The IMF said that emerging-market economies were still exposed to sudden shifts in investor confidence that could come if inflation data in the U.S. point to an earlier rate hike than anticipated.

The IMF staff expected the Fed to raise interest rates by 50 basis points in 2016 and then move them gradually higher thereafter, the report said.

The Fed’s policy rate would eventually hit “a long-term equilibrium rate of 2.75% by 2020,” the IMF said. This is a much lower level than prior to the financial crisis. The Fed’s own forecast is that rates will top out at 2.9%.

The IMF backed the Fed’s pause after the initial rate hike last December, given that wage growth and consumer price inflation remain subdued.

The agency didn’t say when it thought the Fed would hike rates. It said further rate hikes “should be gradual amd tied to clear signs that wages and prices are firming durably.”