USA: it will take inflation “a few years” to return to 2%

After hitting a 9.1% year-on-year high in more than 40 years in June, US inflation slowed in July to 8.5%, according to the consumer price index. ICC

It will take “a few years” for inflation to return in the United States to the 2% target of the American central bank (Fed), an official of the institution estimated on Tuesday, stressing that rates will continue to be raised. to stem this price increase.

“We have communicated over and over again our commitment to reach this level of 2%. I think it will take a few years,” New York Fed Chairman John Williams said in an interview with The Wall Street Journal.

“The situation is very difficult. Inflation is very high. The economy encounters many obstacles. I think it will take a few years, but we will get there,” he added.

The size of the key rate hike that will be decided at the next meeting of the Fed’s monetary committee, on September 20 and 21, will depend on the data, underlined John Williams, who has voting rights during the meeting.

But “it is clear that we need to raise interest rates considerably by the end of the year”, because inflation is “far too high. And that’s really what we’re focused on,” he added.

After hitting a 9.1% year-on-year high in more than 40 years in June, US inflation slowed in July to 8.5%, according to the consumer price index. ICC.

The figures for August will be published on September 13, and will show whether the slowdown is confirmed.

The job market, on the other hand, remained tight in July, with job vacancies and resignations still as high as in June, according to data from the Bureau of Statistics (BLS) published on Tuesday. The labor shortage that the country has been experiencing for more than a year is helping to drive prices up.

Fed Chairman Jerome Powell warned in his annual Jackson Hole symposium on Friday that the fight against inflation would take “time” and would “suffer American households and businesses” but that giving up would be even more damaging to the economy.

He had thus warned that the Fed would use “vigorously its tools” by raising interest rates.

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