The second phase of the fight once morest inflation is launched in the United States. After raising rates sharply since the spring, the central bank is now slowing the pace and has drastically reduced its growth forecast for 2023.
The US central bank (Fed) on Wednesday raised its main interest rate by half a percentage point. This is now in a range of 4.25 to 4.50%, the Fed announced in a statement issued following its meeting. The decision was taken unanimously.
New increases in perspective
This is the highest level since 2007, but the Fed warns that it is not yet time to stop: further increases “will be appropriate”, specifies the institution.
Its officials even plan to make them climb beyond 5.00%, when they anticipated 4.6% in the previous forecasts published in September.
The fight once morest inflation is changing
This slowdown in rate hikes marks the start of a new phase in the fight once morest inflation, which has been a priority for the US Federal Reserve for months.
Faced with a rise in prices to their highest level in more than 40 years, the Fed had pulled out the heavy artillery, raising its rates by three quarters of a point on four occasions, a level of increase to which it had not previously resorted since. 1994.
>> Lire: US central bank makes biggest rate hike since 1994
Less optimistic forecasts for 2023
The Fed, however, is a little less optimistic than in September on the path of inflation. She now sees it slowing down to just 3.1% in 2023, when she was counting on 2.8% previously, according to the PCE index that she favors and wants to bring back around 2%. For 2022, it expects 5.6%, once morest 5.4% three months ago.
It is necessary to have more “evidence” to be confident” that inflation is in the process of slowing down durably, underlined the chairman of the Fed, Jerome Powell, during a press conference.
The central bank has also drastically reduced its growth forecast for 2023, now expecting 0.5% once morest 1.2% previously. However, it raised it a little for this year, also to 0.5%, once morest 0.2% previously.
The institution does not mention a recession for next year, despite the risks caused by its fight once morest inflation, which might slow down economic activity too much. As for the unemployment rate, currently 3.7%, she sees it rising to 4.6% in 2023 and 2024, a little higher than the 4.4% she previously forecast.
afp/oang
