Rates are expected to rise further. After the new 75 basis point hike announced on Wednesday, the Fed’s benchmark rates are likely to rise again in 2022.
While inflation and salary increases remain high on the other side of the Atlantic, the president of the Fed assured at a press conference that the financial institution will continue to tighten its monetary policy until inflation has slowed down.
He also warned of the risks that a “premature relaxation of monetary policy” could entail.
“No painless method”
But in the meantime, the head of the US Reserve expects to increase them again in 2022 and assumes the consequences that these successive increases will have on the US economy.
The Fed now forecasts almost zero growth for 2022 (+0.2%) compared to the 1.7% forecast in June. It revises its forecasts for the coming years downwards with 1.2% in 2023, 1.7% in 2024 and 1.8% in 2025. Unemployment, which today is at its lowest level in 50 years ( 3.7%), could rise again to 4.4% in 2023.
Source: BFM TV
