(Washington) The American central bank (Fed) must “resist the temptation to act quickly when patience is necessary,” one of its officials said on Friday, thus in turn warning against the risk linked to a premature start of the drop in rates.
“We must resist the temptation to act quickly when patience is needed and be prepared to respond with agility as the economy evolves,” San Francisco Fed President Mary Daly said in a speech in Washington.
Many Fed officials have warned in recent weeks that starting monetary policy easing too soon could cause inflation to rebound.
Mary Daly thus welcomed the progress made on the inflation front, but clarified that “progress is not victory”.
“Perhaps most striking is the confidence shown by households, businesses and markets that progress on inflation will continue.
But she also warned of the dangers of delaying too much in lowering rates: “slowing progress on inflation is not the only risk we face. On the other side […]the labor market could weaken, although this is not the case at the moment.
The Fed, after raising rates to their highest level in more than 20 years to curb high inflation, now plans to start lowering them in the coming months.
Fed Chairman Jerome Powell has repeatedly considered it unlikely that the monetary policy committee will have reached a sufficient level of confidence in the trajectory of inflation by then for a first cut to be decided as soon as possible. the next meeting in March.