“We are determined to take the next steps that will be necessary,” however assures the new member of the Fed.
It will probably take time to see inflation slow in the United States, an official of the American central bank (Fed) warned on Tuesday, stressing that economic growth should suffer.
“Restoring price stability could take time and it will certainly lead to a period of below-trend growth,” warned Philip Jefferson, who was giving his first speech as Fed governor, a position he has held for the past month. of May.
But the institution is determined to stem the vertiginous curve of inflation: “we are determined to take the next measures that will be necessary”, he assured, during a conference on technological innovations organized by the Fed. of Dallas, Atlanta and Richmond.
Inflation slowed to 6.2% in August year on year, according to the PCE index, favored by the Fed. Over one month, however, prices, which had contracted by 0.1% between June and July, started to rise again, and rose by 0.3% in August compared to July.
The Fed is targeting 2% inflation over one year, a level considered healthy for the economy.
“Inflation creates an economic burden for households and businesses,” which can “alter expectations” about the foreseeable duration of inflation, he noted Mr. Jefferson, warning that that “these inflation expectations may become entrenched and, in doing so, increase the likelihood that high inflation will persist”.
While some data shows “that supply bottlenecks have finally started to resolve”, the labor market, on the other hand, remains very tight, with a shortage of workers, he mentioned.
But “as growth has slowed this year, supply and demand conditions in the labor market – and the economy as a whole – seem likely to ease,” however, anticipates Mr. Jefferson.
The labor market situation in September will be published on Friday. The unemployment rate is expected to be stable compared to August, at 3.7%.
Mr. Jefferson, an African-American economics professor, took up his post on May 23 on the board of governors of the American Federal Reserve, to which he had been appointed by Joe Biden, then confirmed by Congress.
He was appointed at the same time as Lisa Cook, former economic adviser to Barack Obama at the White House and the first black woman to hold a post of governor of the Fed. She will deliver her first speech on Thursday since taking office.