An official from the American central bank (Fed) on Tuesday was “cautiously optimistic” about the trajectory of inflation, and believes that rates could begin to be lowered by the end of the year.
“While I remain cautiously optimistic that inflation will fall, it is still too high and is only falling slowly,” Adriana Kugler, a Fed governor, said in a speech at the Brookings Institution.
“We need to make further progress towards 2% inflation before we are convinced that inflation is sustainably approaching this objective,” she added, estimating: “if the economy develops as I predict, it will be “probably appropriate to start easing the policy later this year.”
At the end of its meeting on Wednesday, the Fed announced that it would maintain rates in the range of 5.25 to 5.50%, their highest level since 2001.
Its officials reiterated that they would need to observe several months of inflation progressing towards the 2% target before considering lowering rates. And have signaled that they expect only one drop this year.
Inflation slowed in April and May in the United States, after a rebound this winter. It stood at 3.3% over one year in May compared to 3.4% in April, according to the CPI index, on which pensions are indexed.
The PCE index, a measure favored by the Fed, remained stable in April at 2.7% over one year. The May figures will be published at the end of June.
“I believe that the current stance of monetary policy is sufficiently restrictive to help slow the economy and bring inflation back towards 2% without a sharp contraction in economic activity or a significant deterioration in the labor market,” he said. emphasized Adriana Kugler.
Although she regrets that inflation remains “too high”, she nevertheless notes that “recent data on the economy and inflation (l) also encourage cautious optimism: we are on the right track and we continue to progress towards the 2% inflation target.
“This progress may have paused in the first three months of the year, but information collected since then on economic activity, the labor market and inflation points to further progress,” he said. she again affirmed.