(Washington) The consensus seems to be growing among the leaders of the American central bank, for one or more sharp increases in key rates in 2022, after new comments to this effect from an official of the institution on Wednesday.
Posted at 7:15 p.m.
“I think we’ll have to raise (rates) 50 basis points,” or half a percentage point, Cleveland Fed President Loretta Mester told a press conference call.
She spoke of “several increases” of such magnitude.
The Fed, at the end of its last meeting on March 16, raised its rates for the first time since 2018 in order to combat inflation at its highest in 40 years, and had opted for the usual increase of a quarter of a point.
“We are going to have to raise key rates this year and next year to control inflation,” said Mr.me Mester, believing that “the main current economic difficulty is inflation”.
And strong increases can be made, according to her, without penalizing employment or economic growth: “I am convinced that we can do what we intend to do, that is to say control inflation , while supporting the growth and health of the labor market”.
Several officials of the institution, including President Jerome Powell, have in recent days said they are ready to be more aggressive, perhaps even at the next meeting, on May 3 and 4.
The president of the Cleveland office of the Fed specified that she had nevertheless voted last week for an initial increase of only a quarter of a point, “because we were starting from zero”, stressing that “it was a message important to send.
St Louis Fed President James Bullard, who alone voted against a quarter-point hike in favor of a straight half-point hike, called again on Wednesday during a an online conference, to “see bigger” than before.
“It’s not just a little inflation. That’s a lot of inflation,” he stressed, believing that it “could be brought under control in 2023.”