The US Fed could pause raising interest rates, from when?

After the data of iinflation moderates that met on Thursday raised bets that the Federal Reserve The US could stop its aggressive campaign to lower prices, but other voices warn that the mission is not over.

It is increasingly likely that those responsible for Fed monetary policy keep the same interest rates at their next meeting, then new signs of relaxation of inflation.

The report published on Thursday showed that the Consumer price index (CPI) core, which excludes the often volatile food and energy prices, it rose 0.2% for the second month in a row.

This sets the lowest consecutive rise in more than two yearswhich adds to the constant disinflation of recent months.

The president of the Federal Reserve Bank of San Francisco, Mary Daleydeclared in an interview for yahoo finance that the data “was largely as expected, and that’s good news.”

“It is not a fact that says that victory is ours. Still work to do. And the Federal Reserve is fully committed to bringing inflation back to its 2% target,” he said.

Interest rates: the monetary authority is divided

The authorities are divided on how to proceed from now. A faction of the monetary policy committee of the fed argues that the last year and a half of interest rate hikes has done its job, while another group argues that pausing too soon could jeopardize acceleration of inflation.

In June, the Fed held the fed funds rate steady for the first time since it began raising rates in March 2022, but estimated two more increases in 2023. The first of these was fulfilled in July, and it is not clear if there will be a second.

Earlier this week, Federal Reserve Governor Michelle Bowman reiterated her view that the central bank may have to raise rates further to fully restore price stability, while the president of the Federal Reserve Bank of Philadelphia, Patrick Harkerstated that the authorities could remain stable.

The cooling of inflationalong with moderating job and wage growth, fueled hopes that the Fed can rein in price hikes without causing a sharp rise in unemployment.

Several economists, including those from JPMorgan Chase & Co. and Bank of Americaabandoned their forecasts of recession in the last weeks.

Inflation: still to do

But the chairman of the Federal Reserve, Jerome Powell, will not declare victory yet. Although he has said that the central bank is slowing its rate of hikes as it approaches the maximum, he does not rule out the possibility of increases in consecutive meetings.

The slowdown in price growth observed in July “is enough to keep the Fed on the sidelines in Septemberbut not to declare victory,” said chief economist diane swonkfrom KPMG in Chicago.

Before the meeting on September 19 and 20, those responsible for monetary policy will know other data on the CPI and employmentso the Federal Reserve may want to keep the option of raising rates open later due to a possible reacceleration in the economy.