Price display a drop of 0.1 % thanks in particular to the action of the American central bank on interest rates. But the Fed is now attacked from all sides, while a budgetary war is profiled between democrats and republicans.
by Arnaud Leparmentier (New York, correspondent)
Price fell 0.1 % between November and December in the United States, due to the decline of 4.5 % of energy prices. And over one year, inflation fell at the end of 2022 to 6.5 %, according to figures published Thursday, January 12 by the US Ministry of Labor. This statistic, in accordance with expectations, confirms the reflux of inflation, which was 7.1 % in November and had reached a maximum of 9.1 % in June 2022, the worst figure in forty years. Excluding food and energy, prices increased by 5.7 %, down 0.4 points in one month. “For the first time since the return of inflation, the underlying inflation of the euro zone has exceeded that of the United States”, rejoices the economist of Harvard, Jason Furman.
Decrease in federal deficit
The worst has therefore passed, while the salary increases are too. The decline in inflation in 2022 has three main causes: the absorption of “strangulation bottlenecks” (raw materials, labor, microprocessors, freight) which hampered economic recovery; The Fed monetary policy, which resolutely brought its rates in 2022 from zero to 4.25 %; The restrictive fiscal policy, which, with the end of the anti-Cavid plans, saw the federal deficit go from 2,600 to 1,400 billion dollars between 2021 and 2022.
Except that political games are likely to disrupt work, a return to inflation of around 2 % while avoiding a recession. The first risk is the attacks on the Fed, which should, according to market anticipations, be satisfied with an increase in rates limited to 0.25 points at the end of its next meeting, the 1 er February.
The challenge, for its president Jerome Powell, is to keep its credibility: the financial markets do not believe in its determination and lower the rates and raise the shares as soon as they have the possibility, believing that the bank central will have to backtrack to avoid a recession. Many also criticize the institution for going too far. On the left, the Senator of Massachusetts, Elizabeth Warren, asks for a break: “Inflation has slowed down for six months, offering families more room for maneuver. The Fed must take these data into account and not throw the economy in the Precipice with increases in more extreme interest rate. “
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