“Inflation is too high” in the United States, said on Monday an official who voted on central bank interest rates, obviously not ready to vote in favor of a new relaxation.
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Investors are massively expecting the federal reserve (Fed) to reduce its guiding rates at the end of the month for the second time in a row in order to give the economy a boost, according to the CME Fedwatch watch tool.
But at least one of the twelve officials voted on interest rates seems to be reluctant: the president of the Fed of Kansas City, Jeff Schmid.
In a speech, he notably worried about the increase in lasting goods (cars, furniture, household appliances), a category that had tended to be always more affordable “in the past 30 years”.
He attributes it to the taxation of customs duties by the American executive, many of these products being imported.
On the other hand, data on the economy and the form of the financial markets make him say that there is no danger in the abode, and that monetary policy “is only slightly restrictive, as it should be according to (him)”.
Jeff Schmid had voted with his colleagues in September for a drop in interest rates of a quarter of a point.
He described on Monday this decision as “adequate risk management strategy”, when the job market presented signs of breath.
And make it clear that his priority was now, again, the fight against inflation. “The Fed must maintain its credibility in terms of inflation,” he insisted.
