An official of the Fed, the American Central Bank, said on Wednesday that it was open, for the next meeting, to a rise in the key rate greater than that of February 1, in the face of inflation which remains strong in the United States.
“I’m open at this point to a 25 or 50 basis point hike,” or a quarter or half a percentage point, Minneapolis Fed chairman Neel Kashkari said in a meeting with executives. of business.
An increase of 25 basis points would mark continuity with the previous increase in the key rate, on 1 February. The pace of rate increases had then slowed, after a 50 basis point increase in December, and four increases of 75 basis points previously.
If the Fed decides, at its next meeting on March 21 and 22, to raise rates by 50 basis points, it would therefore be a new acceleration.
At this meeting, as is the case half the time, each Fed official will say how far he sees rates rising, in a document called a “dot plot”, which shows the anticipated levels using points.
“I think where the points end up will be much more important than whether we go up 25 or 50 at the next meeting,” Neel Kashkari said.
Inflation rose again in January in the United States, to 5.4% over one year, according to the PCE index, favored by the Fed, and which it wants to bring back around 2%.
To do this, the Fed has been raising its main key rate for the past year. This, which was then within a range of 0 to 0.25%, is now between 4.50 and 4.75%.
Another measure of inflation, the CPI index, which is a benchmark and on which pensions are indexed, for its part showed a slight slowdown, to 6.4% over one year, against 6.5% in December, accelerating however over one month for the first time since September, to 0.5% against 0.1%.
Neel Kashkari also mentioned the shortage of labor that the country has been experiencing for more than two years, contributing to a rise in wages.
“We are still lacking workers compared to before the pandemic”, he underlined, referring to the million deaths from Covid-19 in the United States, immigration which dried up “before and especially during the pandemic”, but also people facing childcare problems, who have health problems, or are caring for loved ones.
However, according to him, “the only answer is immigration”.
“If we want our economy to grow to its full potential, we need more workers to produce things and more consumers to buy things and the only answer to that is immigration,” he said.
Despite the Fed’s efforts to slow down economic activity, which should weigh on employment, the unemployment rate in January was at its lowest in over 50 years, at 3.4%.