US inflation is “widespread,” says senior Fed official

The US inflation is “widespread” and the road to a small and stable price increase could be long and difficult, a senior official at the Federal Reserve (Fed), the central bank of that country.

The various measures used to calculate inflation “have passed their peaks but remain elevated, suggesting that inflation has become widespread in the economy,” Lisa Cook, a member of the Fed’s rate-setting committee, said in a speech. at Georgetown University, Washington.

Inflation in the United States slowed to 5% year-on-year in March, the lowest rate in almost two years, according to the CPI index released last week. however, it is too high compared to the Fed’s 2% target.

The institution takes into account another measure, the PCE index, whose March figures will be published on April 28. Cook anticipates a figure slightly above 4 percent.

“However, the big question is whether and how fast inflation will continue to decline towards our 2% target,” he continued.

“So far, most of the decline has been due to the moderation in energy prices,” he said, adding that “the road back to our low and stable inflation target could be a long one, probably bumpy and full of potholes”.

To curb inflation, the Fed has been raising its benchmark rate since March, prompting commercial banks to offer their customers loans at higher rates, in order to slow consumption and ultimately ease pressure on prices.

The next Fed meeting will be on May 2-3. Rates are currently in a 4.75-5% range, the highest since 2007, and most market participants are pricing in another quarter-point hike, based on CME Group’s valuation.