The monetary meeting of the US Federal Reserve ends this Wednesday, July 27. A further rise in interest rates is expected. The Fed will have to strike hard to pull the US economy out of inflation, but without falling into recession.
This is the fourth increase in a row. And probably not the last… Some specialists speak ofan increase in key rates three quarter points. Others suggest a more drastic increase: one point.
It must be said that inflation broke a new record in June, ie 9.1% over one year. The objective sought by the Washington institution: to make credit more expensive to slow down consumption, but above all to loosen the pressure on prices.
For the Federal Reserve, inflation is a scourge that particularly affects poor households. It would take a significant drop in inflation for the institution to consider stopping raising rates or at least slowing down the pace. This condition could possibly be fulfilled in September.
Problem: the long-awaited economic slowdown to bring prices down may prove too strong, and plunge the world’s largest economy into recession.
The danger is real. In its latest forecasts, the International Monetary Fund is now only counting on 2.3% growth in the United States, ie 1.4 points less than expected.