The US Federal Reserve (Fed) may raise the base rate again soon due to poor inflation dynamics, said Mary Daly, president of the Federal Reserve Bank of San Francisco, speaking on March 4 at a symposium on economic policy at Princeton University.
Despite the fact that the Fed’s base rate has risen from near zero to 4.5%-4.75% over the past year, inflation in the US has yet to respond as needed. The Fed’s inflation target is 2%, while the real rate in January was 5.4%. At the same time, the new inflation forecast indicates likely growth.
Inflation acceleration in January “It talks about how the disinflationary boost we need is far from guaranteed.Daly said. to put this episode of high inflation behind us is likely to require further policy tightening, sustained for a longer time.”.
Recall that the United States entered an inflationary crisis in the fall of 2021 due to a sharp increase in fuel prices, which caused an increase in the cost of transportation and transported goods. Overlaid on this was the policy of sanctions, intended to undermine the Russian economy, but which also hit American households hard.
Source: Rossa Primavera
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