(Washington) A governor of the American central bank (Fed) indicated on Friday that she did not anticipate any rate cut in 2024, the rebound in inflation since the start of the year pushing back the prospect of an easing of monetary policy in the United States.
Michelle Bowman said that when updating the Fed’s economic forecast in March, she warned that she believed there would be no reduction this year, according to an interview with Bloomberg. .
She specified that she then expected rates, which have been at their highest level in more than 20 years since July, to remain at this level “longer”.
“And that remains my base case,” she warned.
The Fed has, on 1er May at the end of its meeting, maintained its rates in the range of 5.25 to 5.50%.
A few months earlier, however, she was planning to start lowering them later this year. But the rebound in inflation since January has pushed it to postpone this movement, in order to avoid a new surge in prices.
In March, inflation rose to 2.7% year-on-year in the United States, according to the PCE index favored by the Fed –– the one it wants to reduce to 2% – and to 3.5%. according to the CPI index, whose data for April will be published on Wednesday.
Fed Chairman Jerome Powell warned that it would likely take “longer than expected” before there was confidence in falling inflation and therefore could begin to lower rates.
Michelle Bowman wants to observe “several months of progress” before she can consider starting the movement. It will take, she said, “probably a number of meetings (of the Fed’s monetary committee) as well before I’m comfortable with that.”
The Fed meets every six weeks.