A US central bank (Fed) official said on Monday that a further pause in rate hikes at the next meeting in September is possible, if the country’s economy continues to evolve positively.
If the economic data to be released between now and the September 19-20 meeting shows that inflation continues to ease and economic activity and employment remain strong, I think everyone will be comfortable staying where we are, estimated the president of the Chicago Fed, Austan Goolsbee, during an interview on Yahoo finances.
The Fed on Wednesday raised rates for the 11th time since March 2022, after a pause at its previous meeting in mid-June. Its main key rate is now in a range of 5.25 to 5.50%.
Austan Goolsbee, who in 2023 has rotating voting rights within the Monetary Policy Committee (FOMC), the Fed’s decision-making body, however warned that no decision is assured at this stage: Nothing is excluded, nothing is certain. Let’s not tie our hands.
I have not yet decided what should happen in September, he still underlined.
Austan Goolsbee hailed the Fed’s success so far in bringing down inflation without causing significant damage to the economy.
Our objective is to stay on what I call the golden path, which is to reduce inflation without causing a major recession. And that would be a triumph for the Fed (…). We have never succeeded in bringing down inflation as much as we have done so far without recession, he explained.
According to him, achieving this goal is certainly a possibility at this stage.
Fed Chairman Jerome Powell kept all options open on Wednesday during his press conference after the FOMC meeting.
We may raise rates again at the September meeting if the data warrants. (…) It is possible that we choose to stay at the same level, he was content to comment.
But the recession, which seemed inevitable a few months ago, now seems to be able to be avoided. Fed economists have just removed this risk from their economic forecasts, anticipating however a significant slowdown in growth, according to Jerome Powell.