(Washington) 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 increase prices.
Posted at 12:06 p.m.
Updated at 12:31 p.m.
“Bringing inflation back significantly and persistently towards our 2% target (will require) key rate hikes until at least the start of next year,” said Christopher Waller, one of the institution’s governors. , noting that the precise pace will depend on how the economy develops.
“It’s a fight we can’t walk away from, and we won’t walk away from. […] We will continue to aggressively fight inflation,” 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 in 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 meaningful recovery […] in order to put our policy in a position to really slow down demand”, indicated Christopher Waller, warning however that bringing inflation back to around the 2% considered healthy for the economy, “will take time”.
US inflation slowed in July, after hitting its highest level in more than 40 years in June. At 8.5% over one year, according to the CPI index, it nevertheless remains very high.
It is still too early to say that inflation is slowing significantly and permanently.
Fed Governor Christopher Waller
He believes that recession fears which “have faded and the 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 underlined, while the figures “confirm that the Fed has reached its (objective) of full employment, so my attention is focused on the drop in 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 stressed.