(Washington) The American central bank (Fed) could start raising its key rates “quickly after” having reduced its asset purchases to zero, a prerequisite which should be met in March 2022, one of the governors of the United States said on Friday. institution.
“Based on my outlook for inflation and labor market conditions, I think an increase […] will be justified soon after we end our asset purchases, ”said Christopher Waller in a virtual speech at the New York Forecasters’ Club.
“The right time for the first hike […] will depend on the development of economic activity, ”he stressed.
The powerful Federal Reserve announced Wednesday, at the end of its monetary policy meeting, that it would accelerate the pace of reduction of its asset purchases, in order to fight inflation.
Indeed, the usual tool in the face of rising prices, which in November was at their highest for 40 years, is to raise key rates. For this, the Fed wants to have reduced its asset purchases to zero, which should happen in March, three months ahead of the initial schedule.
This acceleration “gives us flexibility for further adjustments in monetary policy, if necessary, starting in the spring, to adapt to the changing economic outlook,” said Waller.
He notably highlighted the risks posed by the Omicron variant, which “could slow down the recovery or exacerbate inflationary pressures, so we must be ready in the coming weeks to adapt”.
This head of the monetary institution thus underlined that inflation is “alarmingly high, persistent and has widened to new categories of goods and services”.
After two years of surprises, persistently high inflation is the biggest surprise to me.
Christopher Waller, one of the governors of the Fed
Inflation in the United States reached 6.8% in November year-on-year. Never seen since June 1982.