United States: priority to price stability – 01/14/2022 at 09:02

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Jerome Powell promised before the Senate to do everything possible during his second term to prevent inflation from taking root. (© G. Images/AFP)

As inflation soars, the Federal Reserve will do what is necessary to deal with it.

Jerome Powell, the president of the Fed, would he be the best friend of the American stock markets, as Mario Draghi was for the European markets when he was at the head of the European Central Bank?

While investors were lost in guesswork in the face of the swerve in prices in the United States, “JPow”, as its fan club nicknamed it on Twitter, did everything to reassure them.

During his hearing before the Senate, as part of his nomination for a second four-year term, he confirmed that the Fed was preparing to begin the normalization of its monetary policy.

Persistent inflation

In his eyes, the American economy, in the recovery phase, “no longer needs and no longer wants” ultra-accommodating policies, justified so far by the health crisis. Admittedly, the more persistent inflation than expected poses “a serious threat” to the recovery of the job market, but he promised to do everything possible to prevent it from taking root. “If we need to raise rates more over time, we will.” And to ensure: finding price stability is “at the top of the list of priorities”.

Good news never comes alone, Jerome Powell also indicated that the Fed could begin to reduce the size of its balance sheet this year, weighted by 8.770 billion dollars of bonds, a doubling since

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