Slowing inflation without hampering economic growth: a “soft landing” is possible for the United States, said Friday an official of the American central bank (Fed), who also said he was ready to raise further rates if necessary.
“I believe that strong, but patient, monetary policy will allow us to achieve the soft landing that we all want for our economy,” said Philadelphia Fed President Patrick Harker.
At its last meeting, on September 19 and 20, the Fed maintained its main key rate in the range of 5.25 to 5.50%. But warned it might need to be raised again by the end of the year.
The minutes of this meeting showed that for several officials of the institution, the question is now no longer how high rates will rise – now at or near their peak -, but how long they will remain at this level. , the highest in more than 20 years.
“I really don’t expect it, but if inflation were to rebound, I know I wouldn’t hesitate to support further rate hikes, because our goal of getting inflation back to target is simply not not negotiable”, underlined Patrick Harker, who in 2023 will have rotating voting rights within the Fed’s decision-making body, the FOMC.
And when will they start to fall, in order to make credit more accessible to households and businesses?
“I have not told you how long rates will have to remain high,” Mr. Harker told his audience, specifying that he would not be able to do so, and insisting that decisions need to be based on economic data. .
“I expect rates to remain high for some time,” he added simply.
The next Fed meeting will take place on October 31 and November 1.
The president of the Philadelphia Fed also stressed that it is “too early to know the impact” of the current strike at the three major American automobile manufacturers, Ford, General Motors and Stellantis, “as well as union actions going on in the entertainment industry and elsewhere, on GDP or inflation »
“But this will be seen in the data for the coming months,” he stressed.