(Washington) With a more accommodating and optimistic tone than expected, the American central bank (Fed) welcomed the clear slowdown in inflation on Wednesday at the end of its last meeting of the year, and maintained its rates between 5 .25 and 5.50%.

However, it has not yet won the battle, and the economic trajectory could darken in 2024.

“Inflation has fallen since its peak, without a significant increase in unemployment. This is very good news,” emphasized Fed Chairman Jerome Powell on Wednesday in the introduction to his press conference. Without boasting: “inflation remains too high”, and “the path is uncertain”.

“Chairman Powell had an optimistic tone,” noted Rubeela Farooqi, chief economist for High Frequency Economics.

From its peak of 9.1% in June 2022, unheard of since the early 1980s, inflation fell to 3.1%, year-on-year, in November, according to the CPI index.

The enthusiasm of Jerome Powell, usually very cautious, was surprising. He still warned that further rate hikes remained on the table, if necessary.

But Standard Chartered’s Steve Englander, a former Fed economist, reports a “more dovish signal than we or the market expected.”

“The Fed’s turnaround surprised many,” he added, nevertheless raising the hypothesis that with the US presidential election approaching, the Fed might have wanted to signal an easing of risk. well before the start of the primaries.

The indicators seem to be in good shape, with inflation on track, a job market which is rebalancing, and vigorous growth. But the Fed warned that “growth in economic activity has slowed,” a necessary condition for a lasting decline in inflation.

“The likelihood that the U.S. economy will enter recession over the next 12 months is higher than usual,” but “by no means guaranteed,” said Gregory Daco, chief economist for EY.

According to him, several difficulties await in 2024: consumer fatigue with high prices, interest rates still very high and employment growth which is expected to slow.

The measures taken by the Fed to slow inflation take months to be felt in the real economy. This is why it has not raised its rates since July, in order to avoid hampering economic activity.

But it is “possible that this landing ends up being a little harsher than expected, either because disinflation slows or because the impact of past rate hikes on activity and demand intensifies,” warns William De Vijlder, chief economist for BNP Paribas.

The Fed “abandoned its hawkish stance this week, sending a strong message that rate hikes are over and concerns about risks to the economy […] will play a more important role in future decisions,” notes Nancy Vanden Houten, economist for Oxford Economics.

The Fed anticipates three rate cuts for 2024.

Will they start in May? In June ? Or even as early as March?

“We are aware of the risk if we wait too long,” assured Jerome Powell.

She anticipates that the Fed will “wait until May, but if the good news continues to come as it has, the Fed will make cuts sooner.”

Furthermore, Jerome Powell ruled out any change in trajectory regarding the reduction of the Fed’s balance sheet.

“The only reason to cut rates and simultaneously stop balance sheet reductions would be a serious and abrupt deterioration in economic conditions, which is not anticipated,” emphasizes Diane Swonk.