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>> Trump would like to see the Central Bank lower rates
>> United States: scheduled pause on Fed interest rates, pending December
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Fed officials would scrutinize possible signs of inflation and changes in the labor market before making any decision.
Photo: AFP / VNA / CVN |
"A monetary policy strategy must find a way to combine future data and a model of the economy with a healthy dose of judgment – and humility! – to formulate and then communicate the rate of interest rate policy (in accordance with ) Our goals"said Fed Vice President Richard Clarida at a conference in New York.
Based on past experience and the latest economic data, he recommends "a gradual normalization policy to the extent that it will allow the Fed" to accumulate more information for future decisions.
He also estimated that interest rates were "closer" the neutral rate, an ideal level (probably close to 3%, according to specialists) that does not restrict or stimulate the economy.
"Close to how much is a matter of judgment, and there is a variety of views within the FOMC"the Central Bank Monetary Committee, he admitted.
"The fundamentals of the US economy are robust (…) Private sector forecasts for the entire year (…) suggest that growth should be 3% or a little more "insisted Richard Clarida.
If confirmed, 2018 growth would be the fastest in the current expansion cycle, which entered its tenth year last July. "If, as I expect, economic growth continues in 2019, it will be the longest American expanson in history.", he also noted.
Richard Clarida seems to have eased his position since in a speech late October, he then estimated that even after three rate increases this year, the interest rate policy of the Fed (at 2.25%) would stimulate the economy again. .
And, the Fed chairman, Jerome Powell, had for his part stressed that the Fed was far from returning to a level that would no longer energize the economy.
But in the face of the volatility of financial markets in recent weeks, already shaken by Donald Trump's trade policy decisions, officials now seem to be adopting a more cautious stance.
Tuesday, November 27, Richard Clarida has highlighted the difficult equation: raising rates too quickly may shorten economic expansion; raising them too slowly could accelerate inflation, which could jeopardize financial stability.
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