(Washington) Data on inflation published Wednesday in the United States should reassure the American Federal Reserve (Fed) in the idea that it would be welcome to take a pause before lowering its interest rates again.
Posted at 10:55 a.m.
Updated at 4:22 p.m.
Myriam LEMETAYER
Agence France-Presse
The Labor Department’s release of the Consumer Price Index (CPI) for December was well received by the markets.
Certainly, it reflects an acceleration in inflation for the third month in a row, driven by the increase in the prices of housing, plane tickets, used vehicles and even car insurance.
But its level (+2.9% over one year) is in line with the consensus of analysts surveyed by MarketWatch.
Above all, analysts note the improvement in so-called core inflation – which excludes volatile food and energy prices. This slowed down to 3.2% over one year, compared to 3.3% anticipated.
“This decline in underlying inflation is a relief, even if it remains well above the Fed’s 2% target,” notes Jochen Stanzl, analyst at CMC Markets, in a note.
“Despite all the excitement this is causing, inflation is no longer a cause for concern” for the moment, considers Gregory Daco, chief economist at EY.
The Fed favors another measure, the PCE index, which has also recently increased (+2.4% year-on-year in November). Data for December will not be released until January 31.
” Patient ”
The American central bank, which aims to reduce the progression of this index to 2%, will hold its next monetary policy meeting on January 28 and 29, a week after the inauguration of Donald Trump.
The president-elect promised to restore purchasing power to Americans who experienced up to 9.5% inflation over one year in the summer of 2022.
Donald Trump intends to reduce taxes on individuals and companies, sharply increase taxes on imported products or even carry out mass expulsions of undocumented immigrants, at the risk of increasing inflation, particularly due to lack of labor. according to experts.
Donald Trump and his teams contest this reading, promising a “new golden age” for the country.
“With a still high rate of inflation, a vigorous labor market and prospects of reforms to customs duties and migration policy likely to raise inflation, the Fed will be cautious and patient before lowering rates further. rate,” said Kathy Bostjancic, chief economist at Nationwide, to AFP.
The central bank had systematically lowered its rates during its last three meetings, for a total of one percentage point.
But with inflation rebounding, or ceasing to calm down, financial players expect this downward cycle to be put on pause, to avoid overheating the economy.
In its “Beige Book” published Wednesday – a regular survey of business leaders from one end of the United States to the other – the Fed notes that the majority of American companies are “optimistic” for 2025 although worried to see the policies announced by Donald Trump alter the progress of the economy.
Several regions noted that manufacturers were building up stocks in anticipation of increases in customs duties. And many sectors of activity have reported “difficulties in recruiting qualified workers”.
