growth but not too much to curb inflation, recommends the chairman of the Fed

American growth must remain positive without being too strong to be able to curb inflation, indicated Tuesday May 17 the president of the American central bank (Fed), Jerome Powell. “What we really need is to get growth back down from its very high levels of last year, to slow down while remaining positive.“, so that supply and demand can be at the same level, and that inflation slows down, he said during a conversation with the Wall Street Journal.

The institution will tighten its monetary conditions sharply until there is evidence “obviousas inflation slows down, said Jerome Powell. If inflation does not decelerate quickly enough,then we will have to consider acting more aggressively“, he said. If the price curve really slowed down, “then we can consider moving to a slower pace“.

The Fed began in March to raise its key rates in order to slow down inflation, which is at its highest in 40 years. After an initial rise of a quarter of a point in mid-March, at the beginning of May it had recourse to a more rapid rise, of half a point directly, the strongest since 2000. Key rates are now in a range of 0.75 to 1.00%.

Further increases should be decided at the next two meetings, mid-June and end-July, probably by half a point each, repeated Jerome Powell on Tuesday. The objective is for rates to return to a level known as “neutral”, which does not stimulate or slow down the economy, and is considered to be between 2.00 and 2.50%, up to 3.00%. This level could be achieved”in the fourth quarter“, underlined Jerome Powell, specifying:”we don’t know for sure where the neutral rate is“.

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