© Reuters.
Investing.com – After the release of surprising US inflation data yesterday, officials repeatedly commented on this data, which is estimated to change everything in the coming period, and stimulated the Federal Reserve to reduce the rate of hike, which was reflected in these statements to take the path of calm.
In this context, a member of the US Federal Reserve, Tom Parkin, emphasized that the recent economic data revealed a slowdown in inflation as well as a decline in the risks of a possible US economic recession. James Bullard, a member of the US Federal Reserve Bank of St. Louis, also said: The most likely scenario now is Inflation remains above 2% over the long term.
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There is no need to raise interest aggressively
Tom Barkin, a member of the US Federal Reserve, stressed that the US Federal Reserve may not need to raise interest rates strongly this year, as the bank approved during seven consecutive meetings in the previous year.
He added: Recent consumer price data has revealed slowing inflation as well as a reduced risk of a possible US recession.
In his expectations for the interest in the coming period, he said:
“They may be slower but for a longer period, or higher depending on inflation trends; wages are likely to experience pressure during the first quarter at the very least.”
Slow down
Meanwhile, a member of the US Federal Bank in Philadelphia, Patrick Harker, said that it is time for the US Federal Reserve to slow down the pace of raising interest rates to 25 basis points at its next meetings.
He added: It is likely that the US Federal Reserve will raise interest rates several more times during the year 2023, and if the US Federal Reserve finishes raising interest rates, it will have to keep the interest rate constant for some time.
In his inflation forecast, he said:
“Core inflation is expected to ease to 3.5% in 2023 and reach the US Federal Reserve’s target of 2% in 2025. The time for big price increases is over.”
Acceleration of interest rates
As for Pollard, he said, “It is difficult for the US Federal Reserve to predict how high unemployment will rise, especially since the labor market is still strong.”
He added, “Inflation remains very high, even if recent CPI data show it is slowing. It is still well above the Fed’s targets but moderate.”
Bullard expects inflation to decline significantly as we continue to tighten monetary policy, praising the Federal Reserve’s monetary policy decisions.
Bullard continued, “The US Fed needs to avoid a repeat of the 1970s, and it must keep interest rates high for long enough to make sure inflation goes down. The US Fed needs to get the interest rate above 5% to definitely curb inflation.”
And he concluded, “If the Fed aims to exceed the 5% interest rate, it is better for it to reach it as soon as possible.”
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