Kiosk360. Inflation is hitting America hard and the competent authorities are in the oven and in the mill to curb the crisis. This article is a press review of the French newspaper La Tribune.
Latribune.fr, which returns to the subject in one of its recent publications, reports that the Federal Reserve, which met its committee, should announce today Wednesday a new increase in its key rates, by 75 basis points. This new increase will mark the fourth time since the beginning of this year. “The scenario of a 100 basis point hike no longer seems to be in order, the risks of recession having receded in recent days”, specifies the newspaper, adding that if in its new forecasts on the world economy published this On Tuesday, the International Monetary Fund (IMF) revised its April projections sharply downwards, the institution nevertheless expects US growth of 2.3% (-1.4 points) in 2022 and 1% in 2024 (-1.3 points).
“For her part, Treasury Secretary Janet Yellen told NBC on Sunday that a recession is a general contraction that affects many sectors of the economy. We just don’t have that, arguing that the labor market is now extremely strong,” the newspaper explains.
Note that the unemployment rate in June stood at 3.6% for the third consecutive month, the lowest since February 2020. “During his press conference on Wednesday, Jerome Powell, the president of the American central bank, should also present the perspectives of the institution on the American economy, and specify the way in which the members of the institution envisage the continuation of the monetary tightening”, indicates one.
It should also be noted that the Fed recently seemed to put more emphasis on real-time inflation as well as on household inflation expectations, while brushing aside the forecasts of its internal economists showing a sharp drop in inflation in the coming months. month, or bond market expectations, which are also predicting a sharp decline.
“In these conditions, even if further rate hikes are likely this year, the president of the American central bank could be much less precise on the pace and the level of these increases”, adds latribune.fr, noting that inflation has become a highly political issue in the United States. “The dissatisfaction of American households who are losing purchasing power could translate into the ballot box during the midterm elections in November, with the risk for Joe Biden of losing his narrow Democratic majority in Congress”, concludes latribune.fr.