(Washington) The US central bank (Federal Reserve, Fed) is expected to accelerate rate hikes in the coming months, with several officials in favor of it in order to combat high inflation in the United States, according to the minutes of the meeting of the March 15 and 16, published Wednesday.
Posted at 2:56 p.m.
“Many participants pointed out that one or more increases of 50 basis points (half a percentage point, editor’s note) […] may be appropriate at future meetings, particularly if inflationary pressures remain elevated or intensify,” the document reads.
The Fed had started, at this meeting, to raise its rates, but had opted for a more modest increase, of only a quarter of a percentage point.
“Many attendees […] would have preferred a 50 basis point increase,” according to the minutes, but “a number” of them “indicated that in light of greater short-term uncertainty associated with the invasion of Ukraine by Russia, they felt that an increase of 25 basis points would be appropriate at this meeting”.
The rates, which had been in a range of 0 to 0.25% since March 2020, are therefore now between 0.25% and 0.50%.
But it could be “appropriate” to return “quickly” to so-called “neutral” rates, that is to say around 2 or 2.50%, according to members of the Fed’s monetary committee.
To slow inflation, the Fed also plans to gradually part with the billions of dollars of Treasury bills and other assets it has purchased since March 2020. These have more than doubled the size of its balance sheet, which today stands at around 8.9 trillion dollars, compared to 4.1 trillion in February 2020.
Officials of the mighty Federal Reserve had indeed agreed at their March meeting that it might be “appropriate to begin this process at a future meeting, perhaps as early as May”, is- he further clarified within minutes.
Inflation in the United States is at its highest in 40 years, at 6.4% in February according to the PCE index, favored by the Fed, and at 7.9% according to another index, the CPI, used in particular to the indexation of pensions.
And the rise in prices should accelerate further in the months to come.