“It is possible that interest rates will need to rise to higher levels in order to slow down the economy” (and therefore inflation). Having said that, “it would make sense to reduce the intensity of rates next year, with monetary tightening of 0.25%”. Thus the president of the Kansas City Fed, Esther George, rekindled the hope that the American central bank, also in the light of recent data which confirmed the slowdown in the growth of inflation made in the USA, may decide to raise rates in a way less aggressive than what has been done so far.
Jerome Powell’s Fed raised US rates, last November 2, by 75 basis points, for the fourth consecutive time, taking them from the range between 3% and 3.25% to the new range between 3.75%. % and 4%, a record value since 2008.
Esther George warned at the same time that “the real challenge is the danger of stopping monetary tightening prematurely”.
In essence, said the Kansas City Fed chair, “we have a lot of work to do.”