The majority of US central bank (Fed) officials were in favor of a quarter-point rate hike on February 1, which was decided, but some would have preferred a bigger hike, according to the minutes of this meeting. , released on Wednesday.
Almost all participants agreed that it was appropriate to raise (…) rates by 25 basis points (0.25 -point, is written in the minutes of this meeting.
All, however, voted for the quarter-point raise, and the decision was taken unanimously.
Moreover, all participants are anticipating additional increases in the face of persistently high inflation in the United States, sweeping away hopes of an imminent break.
And, while economic activity is expected to slow in the coming months, due to these rate hikes which aim to curb high inflation, some participants noted that the probability of seeing the (American) economy enter into recession in 2023 remains up, according to the minutes.
The meeting held on January 31 and February 1 was the first of the year for the Fed, which had then raised its rates by a quarter of a point. It was a return to more usual increases, and a slowing of the pace, after two increases of half a point and four increases of three quarter points since May.
We are seeing the start of disinflation, underlined the Chairman of the Fed, Jerome Powell, while pointing to inflation (which) remains high, and the tightening of monetary policy takes time to fully feel its effects.
So, although recent developments are encouraging, we will need more evidence to be convinced that inflation is slowing down sustainably, he insisted.
The rise in consumer prices in the United States fell in December to 5.0% over one year, against 5.5% in November, according to the PCE index.
PCE inflation, an index that the Fed wants to bring back to around 2% over one year, fell to 5.0% over one year in December against 5.5% the previous month, and the January data will be published on February 24.
But another measure of inflation, the CPI index, which is the benchmark, showed only a slight slowdown in January, 6.4% over one year, against 6.5% in December, accelerating even over one month for the first time since September, 0.5% against 0.1%.