The decline in inflation allows the American central bank to finally loosen its monetary policy, three months after its European counterpart. Experts are wondering about the pace.
The slowdown in inflation in the United States, so desired by the Federal Reserve, now places the American central bank in a dilemma. There is no longer any doubt that this Wednesday evening, at the end of the meeting of its monetary policy committee, the Fed will lower its key rate for the first time since spring 2020, after a historic increase that began in 2022 to combat soaring prices. Will it lower its key rate by 0.25%, a classic first step, or will it dare to reduce it by 0.50%? This rate has been maintained between 5.25% and 5.50% since summer 2023.
Markets, encouraged by a number of experts such as William Dudley, former head of the New York Fed, are pushing Jerome Powell and his colleagues to be bold. They are worried about signs of a slowdown in hiring in the United States since last winter. In addition, they have observed a contraction in manufacturing activity since…
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