The ‘requirements’ for raising prices could be met in 2022, says a Fed official

The financial measures needed for the Federal Reserve to raise interest rates could be met by 2022, the head of the US central bank said on Monday.

Vice-chairman Richard Clarida said although the Fed still had a way to go before it could consider any changes in its rates, the “conditions” for interest rates to rise from near zero would be met by the end of next year. year the economy will move forward as expected.

“While we are about to think about raising interest rates, if the perception of inflation and unemployment that I have briefly stated has been a real result of the forecast, then I believe these important conditions will increase the target. for federal funds will be completed by the end of 2022, ”he said Monday in a statement issued at a ceremony held at the Brookings Institution.

The largest US bank last week he announced will begin repaying its $ 120bn per month purchasing plan in November in light of the US economy and its continued inflation. But policymakers have pledged to stop raising interest rates until they reach the workforce and inflation, which is more than 2 percent, so that it will remain at the same level over time.

Mr Clarida said on Monday he expected the labor market to recover sufficiently to confirm inflation by the end of next year, if unemployment dropped to 3.8 percent from the current level of 4.6 percent, as he said. This is consistent with his assessment of the amount of work, he said.

The difficulties of painflation and other shortcomings combined with the growing number of consumers have led to a sharp rise in prices for decades. A major bank that favors rising inflation, a major human food index – which eliminates volatile factors such as food prices and energy – rose by 3.6% in September from the previous year and is close to the end of the year by 3.7%. according to the most recent predictions published by the Fed.

Clarida reiterated the Fed’s view that factors contributing to inflation are expected to disappear over time as shortages and inefficiencies are eliminated, and inflation is expected to decline to 2.3 percent in 2022 and 2.2 percent next year.

Inflation that exceeds that of the central bank, however, Clarida said, acknowledging that inflationary pressures could continue.

“I can’t think of repeating next year as a success,” he said. “There are risks in all respects, and my 12 colleagues and I believe the risk of rising inflation is at stake.”