(Finance) – US inflation slowed to 8.5% in Julycompared to the all-time peak of 9.1% reached in June, but even so, price growth is the highest in the last 50 years and will force the Fed to make new interest rate hikes to cool its growth.
The data, however, heralds a less aggressive attitude of the Fedwhich will probably be limited to one in September retouching by 50 basis points instead of 75 points as previously done. But what do the members of the central bank think?
The president of the Chicago Fed Charles Evans spoke of a “positive reading.”“but admitted that inflation is still” unacceptably “high and indicated that the Fed will still have to raise interest rates to 3.25-3.5% by the end of 2022 and 3.75-4% by the end of 2023. Since interest rates are currently at 2.25-2.50%, this implies that an increase of 100 points between now and December would be enough, of which 50 points are already expected for the September meeting.
Also the president of the Fed from Minneapolis Neel Kashkari warned that the US central bank is still “far from declaring victory” over inflation and has a more austere line than Evans, forecasting a rate hike to 3.9% by the end of the year and 4.4% by the end of 2023.
Echoes the “colleague” of the San Francisco Fed Mary Dalywhich does not exclude another increase of 75 points in September. “Inflation remains too high and not close to our price stability target, “said the banker in an interview with the Financial Times.