(Reuters) – The U.S. Federal Reserve (Fed) is “strongly committed” to bringing down inflation, which has hit a 40-year high, and policymakers are moving “quickly to get there”, its chief executive said on Wednesday. President.
“It is essential that we bring inflation down if we are to have a prolonged period of good labor market conditions that benefit everyone,” Jerome Powell said in a statement prepared for his hearing before the Senate Banking Committee. American.
He added that the pace of further rate hikes would continue to depend on indicators and how the economic outlook evolves.
The Fed has raised rates by a total of 150 basis points since mid-March, including 75 points for the most recent hike, decided last week, days after inflation was even stronger than expected. in May in the United States.
A clear majority of economists and analysts since polled by Reuters expect a further three-quarters point rate hike at the next central bank meeting in late July, followed by a half-point hike in September. .
All in all, according to the survey, the rate target for federal funds (“fed funds”), the main instrument of American monetary policy, could reach 3.25%-3.50% at the end of the year, against 0 %-0.25% until March.
Jerome Powell indicated on Wednesday that Fed decisions would be taken meeting after meeting as inflation moves well above the 2% target, with the consumer price index (CPI) coming out in May in increase of 8.6% on an annual basis.
“Our goal is really to bring inflation down to 2% while the labor market remains strong… What’s becoming more evident is that many factors that we don’t control are going to play a very important role. to decide whether it is possible or not,” he said last week, citing the war in Ukraine and supply problems around the world among those factors.
“There is a path for us to get there (…) It is not easier, it is getting more difficult,” he added, however.
Jerome Powell is also scheduled to speak Thursday before the House Financial Services Committee.
(Reporting Dan Burns; French version Claude Chendjou, with contributions from Marc Angrand, editing by Kate Entringer)
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