The Fed raises rates by 0.25 points

UPDATE DAY

The U.S. central bank raised rates a quarter-point on Wednesday at its first meeting of the year, a slower pace from previous hikes because, if inflation remains high, it shows signs of moderation, as well as economic activity.

“Inflation has slowed down a bit, but remains elevated,” the Fed's monetary policy committee, the FOMC, said in its statement.

Furthermore, “recent indicators show moderate growth in spending and production,” say officials of the monetary institution.

In other words, the situation is improving, but it is too early to claim victory.

And the Fed officials have signaled that further hikes are on the way.

The institution's chairman, Jerome Powell, will hold a press conference at 2:30 p.m.

With this eighth hike in a row, the Fed's rates, which were at zero just a year ago, are now in a range of 4.50 to 4.75%, after a decision taken unanimously .

This increase of a quarter of a percentage point, however, marks a return to a more usual level of increase, after particularly strong increases, of half a point, and even of three-quarters of a dots.

The objective of the rate hikes: to push banks to raise interest rates on loans to households and businesses.

To try to curb inflation, which had reached its highest level in June For more than 40 years, it was necessary to slow down consumption to prevent prices from continuing their vertiginous escalation.

But consumption being the driving force of the American economy, tightening too much could lead to a recession.

For Pierre-Olivier Gourinchas, chief economist of the International Monetary Fund (IMF), who published new forecasts on Tuesday, there is however still “a narrow possibility” that this scenario will be avoided.

Solid labor market < p>The state of the labor market, in particular, is being watched very closely by the Fed, after two years of labor shortages that have pushed up wages, in the midst of high inflation.

Official employment figures for January will be released on Friday. The unemployment rate is expected to rise slightly, to 3.6%, a level however still among the lowest of the last 50 years. The number of job creations is expected to slow down to 187,000 from 235,000 in December, according to the consensus of Briefing.com.

In January, floods in California and heavy snowfalls in several states have slowed job creation in the private sector, according to the monthly ADP/Stanford Lab survey published on Wednesday.

But “we see a job market still strong,” said ADP chief economist Nela Richardson. As for wages, they show a stable increase compared to December.

Another figure, published Tuesday morning by the Department of Labor, had seemed to persuade economists that inflation is now on the right track for a long time. : the average cost of an employee, with a rise in the fourth quarter less marked than those of the previous quarters.

The rise in consumer prices thus fell in December to 5.0% over one year against 5.5% the previous month, according to the PCE index, favored by the Fed, which wants to bring it back to around 2%.

Another measure of inflation, the CPI index, on which pensions are indexed, also showed a sharp slowdown in December, to 6.5% over one year against 7.1%.

Thursday the ECB will meet. The European institution started later than the Fed to raise its rates, and should raise them again, and even hint at other hikes.