The fight against inflation must be the priority of the American central bank (Fed), declared Friday one of its officials, who anticipates increases in key rates at least until the beginning of 2023, to curb this rise in prices.
Bringing inflation back significantly and persistently towards our 2% target (will require) increases in key rates until at least the beginning of next year, anticipates Christopher Waller, one of the institution’s governors, specifying that the precise pace will depend on developments in the economy.
It’s a fight we can’t walk away from, and we won’t walk away from. (…) We will continue to fight inflation aggressively, assured the governor during a speech in Vienna (Austria).
To slow down demand, and thus ease the pressure on prices, the powerful Federal Reserve has been gradually raising its rates since March. These are now within a range of 2.25 to 2.50%.
A further rise of three-quarters of a percentage point is expected at the next meeting on September 20-21.
I support a significant hike (…) in order to put our policy in a position to really slow demand, said Christopher Waller, warning however that bringing inflation back to around the 2% considered healthy for the economy, will take time. .
Inflation in the United States slowed in July, after having reached its highest level in more than 40 years in June. At 8.5% over one year, according to the CPI index, it remains very high.
It is still too early to say that inflation is slowing down significantly and taking hold, Waller warned.
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He believes that waning recession fears and a robust US labor market give us the flexibility to be aggressive in our fight against inflation.
We did not enter a recession in the first half of 2022, he even pointed out, while the figures confirm that the Fed has reached its (objective) of full employment, so my attention is focused on lower inflation .
However, he noted signs of moderation in economic activity, particularly in the real estate market.
As we continue to raise rates, we will have to see, month by month, how households and businesses adjust to the tighter financial conditions and how this adjustment affects inflation, the Governor further underlined.