(Washington) Further lowering inflation in the United States without hampering the labor market is possible, said Thursday an official of the American central bank (Fed), who however warned of certain risks, in particular a rise in commodity prices. energy due to geopolitical tensions.
“I believe a soft landing is possible, with continued disinflation and a strong labor market, but it is not assured,” said Lisa Cook, a governor of the Federal Reserve (Fed), during a conference in San Francisco.
The Fed has, since March 2022, raised its rates 11 times, to curb high inflation in the United States. However, it did not change its rates during its last two meetings, and they remained in a range of 5.25-5.50%.
Several officials at the institution said they were ready to raise rates further if American inflation does not show a lasting slowdown. But maintaining rates at their current level at the next meeting in mid-December seems possible, after the publication this week of encouraging inflation figures.
Ms Cook stressed the need to “balance the risk of not tightening enough with the risk of tightening too much”.
If economic growth remains too strong and the labor market remains tight, “there is a risk” that this “slows the pace of disinflation,” she noted.
“But I am also sensitive to the risk of an unnecessarily sharp decline in economic activity and employment. Parts of the economy are under strain due to tighter financial conditions,” Cook also warned.
She noted that households with the lowest income and wealth “have largely exhausted their excess savings, while delinquencies on auto loans and credit cards have returned to pre-pandemic levels or higher.”
As for small businesses, they “generally borrow on shorter terms than larger businesses, and they face tighter credit terms and higher rates when they roll over these short-term loans,” he said. -she says.
The governor also noted risks at the international level.
“In a context of very high geopolitical tensions, the risk of a sharp rise in global energy prices remains significant,” she warned.
Citing China and Europe, she also cited risks from “signs of moderate economic growth in (the) major trading partners” of the United States, whose “health is affecting U.S. economic conditions.”