WASHINGTON (Reuters) – The period of high inflation in the United States could last a little longer than expected but the central bank should avoid tightening monetary policy too soon as the battle to regain the 7.5 million jobs still remains missing since the COVID-19 pandemic is yet to be won, the Atlanta Federal Reserve Chairman said on Wednesday.
The recent price spike will be temporary but a temporary one that will prove to be “longer than we initially anticipated,” Raphael Bostic told National Public Radio, adding that it could last six to nine months at the time. instead of two to three months.
He said the Fed should nevertheless keep in mind the 7.5 million jobs lost since the onset of the health crisis to assess the state of the US recovery.
Some officials believe that retirements and other individual decisions could make it difficult to return employment to pre-crisis levels.
“This is a benchmark that we all have to keep an eye on. We have to make sure that our policies do not pivot in a way that gives the impression that we are declaring victory prematurely,” he told the radio.
At the end of its last meeting, the US central bank announced that it could prepare to raise interest rates as early as 2023 and no longer in 2024.
(Howard Schneider report, French version Laetitia Volga, edited by Blandine Hénault)
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