“Fed Official Favors Pause in Rate Hikes at Mid-June Meeting to Observe U.S. Economy: Analysis”

WASHINGTON – An official of the American central bank (Fed) showed Wednesday favorable to a pause in the hikes of key rates at the next meeting, mid-June, believing that this would allow time to observe the evolution of the United States economy.

“A decision to keep our policy rate constant at a future meeting should not be interpreted to mean that we have reached the maximum rate for this cycle,” said Philip Jefferson, who was chosen by Joe Biden to become vice-president. Chairman of the Fed, and whose appointment must now be confirmed by the Senate.

In his view, on the contrary, “skipping a rate hike at an upcoming meeting would allow the committee to see more data before making decisions on the extent of further policy firming,” he said. .

Philip Jefferson also indicated that he does not anticipate a recession in the coming months for the American economy.

The next Fed meeting will be June 13-14. It could choose to raise its rates, for the 11th time in a row, or take a break, in order to observe the effects of the hikes already made, and to avoid tightening too much, which could send the economy into a recession.

The Fed has been raising its key rates since March 2022. Included in the range of 0 to 0.25% during the pandemic, they are now between 5.00 and 5.25%.

This leads the banks to raise the cost of the loans they offer to households and businesses, in order to ease the pressure on prices, but at the risk of seizing up activity.

Nearly three-quarters of market participants now anticipate a break in June, according to CME Group’s assessment.

Philip Jefferson had already, two weeks ago, been cautious about a further rate hike. Other officials of the institution had however expressed a more favorable opinion to a new increase.

“A decision to keep our policy rate constant at a future meeting should not be interpreted to mean that we have reached the maximum rate for this cycle,” said Philip Jefferson, who was chosen by Joe Biden to become vice-president. Chairman of the Fed, and whose appointment must now be confirmed by the Senate.

In his view, on the contrary, “skipping a rate hike at an upcoming meeting would allow the committee to see more data before making decisions on the extent of further policy firming,” he said. .

Philip Jefferson also indicated that he does not anticipate a recession in the coming months for the American economy.

The next Fed meeting will be June 13-14. It could choose to raise its rates, for the 11th time in a row, or take a break, in order to observe the effects of the hikes already made, and to avoid tightening too much, which could send the economy into a recession.

The Fed has been raising its key rates since March 2022. Included in the range of 0 to 0.25% during the pandemic, they are now between 5.00 and 5.25%.

This leads the banks to raise the cost of the loans they offer to households and businesses, in order to ease the pressure on prices, but at the risk of seizing up activity.

Nearly three-quarters of market participants now anticipate a break in June, according to CME Group’s assessment.

Philip Jefferson had already, two weeks ago, been cautious about a further rate hike. Other officials of the institution had however expressed a more favorable opinion to a new increase.