(Washington) It is too early to declare victory and end the cycle of rising interest rates, a member of the United States Federal Reserve (Fed) said on Tuesday, while acknowledging that inflation was now moving in the right direction. direction.
“I’m not ready to announce that we’re done, but I see positive signs,” Minneapolis Branch President Neel Kashkari said at a conference in the northern US city.
Over the past 18 months, the Fed has raised rates eleven times to invert the inflation curve and bring it back towards its long-term target of around 2%.
At its peak in June 2022, at more than 9%, inflation has since slowed sharply, returning to around 3% year on year in July, but remains above the target, even more so if we focuses on core inflation, ie excluding food and energy.
The Fed must therefore “take the time necessary in order to have enough data to decide whether or not we should continue” (the hikes), reminded Mr. Kashkari.
“I want to see convincing evidence that inflation is indeed on the verge of getting back to 2%, then it will take some time to stabilize it there,” Kashkari replied when asked about the opportunity for a possible rate cut.
The Fed could, however, according to him, start to lower its main rate in 2024, if the deceleration of inflation is confirmed.
“At some point, someone will think it reasonable to cut rates to keep monetary policy at the desired level,” he said.
“Can it happen next year. It is certainly possible. Or the following year, it will depend on the data so we will have,” Mr. Kashkari concluded.
