The officials of the American central bank (Fed) estimate that it will certainly be necessary to experience a period of weaker growth and a slowdown in the labor market to overcome the inflation which they consider “generalized” and at a “unacceptable” level.
High inflation, in fact, “has not yet responded” to the rate hikes decided by the Fed to slow this increase in prices, they noted, according to the minutes published Wednesday of the last meeting of the Fed, held on September 20 and 21.
Several of these Fed officials pointed out that “acting too timidly would be more costly than acting decisively” on rates.
The priority is therefore the fight against inflation, and the tightening of monetary policy must continue to achieve this objective, “despite the slowdown in the job market”.
President Joe Biden admitted on Tuesday evening that it was “possible” that the United States would suffer “a very slight recession”.
Some U.S. central bank officials, however, “noted that given the highly uncertain global economic and financial environment, it would be important to calibrate the pace of further policy tightening to mitigate the risk of significant negative effects on economic prospects”.
They thus estimated that “once the policy rate has reached a sufficiently restrictive level, it will probably be appropriate to maintain this level for a while until there is convincing evidence that inflation is on close to returning to the 2% target,” the minutes said.
At this meeting, the Monetary Policy Committee (FOMC), the Fed’s decision-making body, raised the main key rate by three-quarters of a percentage point. This now stands in a range of 3.00 to 3.25%.
It was the fifth increase since March, and the third consecutive increase of this magnitude.
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The powerful Federal Reserve had warned that the movement should continue in 2022, until raising the key rate by another percentage point.
The PCE inflation index, favored by the Fed, showed in August a slowdown in prices over one year, to 6.2%, but an acceleration over one month.
Another measure of price increases, the CPI index, which is used in particular to index pensions, will be published Thursday morning for the month of September.
Analysts expect consumer prices to accelerate one month to 0.3% from 0.1% in August, and slow to one year to 8.1% from 8.3%, according to a MarketWatch consensus. .