December 7, 2022

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US Central Bank: Inflation is falling slower than expected - higher interest rates necessary

US Central Bank: Inflation is falling slower than expected – higher interest rates necessary

On Wednesday evening, the central bank released a report on its September interest rate meeting. There they referred to the level of inflation as “unacceptably high”.

Today’s price growth is well above the 2 percent target, and price growth is showing few signs of abating. Several participants saw the need to maintain a restrictive posture for as long as necessary. The report indicates that inflation has not yet reacted to higher interest rates.

In September, the US central bank decided to raise interest rates by 0.75 percentage points – a so-called triple hike – to an interest rate range of 3.0 to 25 percent, the highest rate since 2008. In the minutes, the central bank predicts that the economy will slow as it rises interest rates, but notes that the labor market is still very tight.

Unemployment in the United States is at 3.5 percent, the lowest in 50 years, while labor remains in high demand.

Central Bank President Jerome Powell made clear that strict measures are needed to curb inflation. On Thursday, the official inflation number for September will be published, which will have a significant impact on the next interest rate meeting in November.

Almost as sure as the treasurer, the US central bank will raise the key rate by 0.75 percentage points at the next meeting on November 2, Dansk Erhverv chief economist Tore Stramer told Ritzau News recently.

(NTB)

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