(Washington) It is urgent to wait before initiating a reduction in the key rates of the American Federal Reserve (Fed), as long as inflation data does not show “a sustained trajectory” towards the objective of 2 %, one of its officials estimated on Wednesday.
“We have made a lot of progress in terms of reducing inflation over the past year, but the data from the last two months have been disappointing,” said Christopher Waller, one of the governors of the Fed.
Under these conditions, even if it is obvious in his eyes that a rate cut will have to take place at some point, “I am not ready to go in this direction until progress materializes,” he said. -he notices.
It is therefore necessary, according to him, to “reduce the number of reductions or postpone them” until next year rather than rushing, “taking into account recent data”.
Inflation has in fact slowed less quickly than expected since the start of the year, with the CPI index, on which pensions are indexed, having even rebounded in February, to 3.2% over one year, compared to 3.1%. in January (a figure already higher than expected).
As for the PCE index – favored by the Fed which wants to reduce it to 2% – it will be published on Friday for February, but in January had slowed down over a year, to 2.4% against 2.6%, and accelerated over one month, at 0.3% versus 0.1%.
The Fed, which met last week, still plans to reduce the cost of credit three times this year, despite this rebound in inflation.
But we will have to wait to see the movement start, and, at this stage, it has kept its rates unchanged, at the highest in more than twenty years, in the range of 5.25% to 5.50%.
The markets anticipate a further maintenance of rates at the next meeting, scheduled for April 30 and 1er May, but a first drop the next one, mid-June, with two other drops expected before the end of the year, according to CME Group’s FedWatch monitoring tool.
Christopher Wallen, however, is more cautious, judging that he “needs to see at least several months of better inflation data before having enough confidence to initiate a rate cut to keep the economy on a trajectory of growth. inflation at 2%.