A US central bank (Fed) official said on Friday (May 13) she expects rate hikes of more than half a point as early as September if inflation does not slow, warning that the necessary measures could push up unemployment. and slow growth. “Unless there are any big surprises, I expect it to be appropriate to raise the policy rate by an additional 50 basis points (half a percentage point, editor’s note) at each of our two next meetings”, in mid-June and then at the end of July, underlined Loretta Mester, president of the Cleveland Fed. And if by the September meeting, “inflation is falling, then the pace of rate hikes might slow down, but if inflation hasn’t moderated, then a faster pace of rate hikes might be necessary,” she said.
The Fed began raising rates to dampen demand, by a quarter of a percentage point in March and then by half a point on May 4 – the biggest hike since 2000. Policy rates are now between 0 .75 and 1.00%. “It will be difficult to carry out the necessary tightening of monetary policy to control inflation while maintaining healthy conditions in the labor market”, also warned this voting member of the Fed’s monetary committee, in a video speech during an event organized by the European Central Bank in Frankfurt (Germany). “Growth could slow a little more than expected for a few quarters and the unemployment rate could rise temporarily,” she warned.