The Federal Reserve chose as planned, Wednesday evening, to postpone the announcement of an upcoming gradual reduction in its public debt redemptions, in other words its support for the economy.
She believes that the moment can come "
soon"
.
Translation: we will probably have to wait until November, or even December, for the US central bank to embark on this path.
At the end of a two-day meeting, the monetary committee of the Central Bank of the United States was able to rely on the slight moderation in inflation and the slowdown in job creation in August, to wait before Indicate how quickly it will propose to reduce its monthly purchases of $ 80 billion of Treasury bonds and $ 40 billion of securities secured against real estate claims.
In place since March 2020, this policy, called quantitative easing, keeps long-term interest rates abnormally low to combat the recession caused by containment. Its abandonment, spread over several months, will be the first step towards an increase in the key rate which may not take place for a year, if inflation, which has risen to more than 5%,calm down.
The fear of a US default
Beyond the recent relatively calming signals given by the economy, while a growth rate of around 5% year-on-year is expected for the third quarter, the Fed can also base its wait-and-see attitude on the uncertainty that hangs over it. on two fundamental questions.
The first concerns raising the public debt ceiling: without a Congress vote to allow the Treasury to borrow beyond the current ceiling of $ 28.4 trillion, the US federal state will find itself strapped for cash and unable to pay some of its deadlines.
The precise date of this catastrophic eventuality, which would be an unprecedented event, is unknown, but probably falls around mid-October.
The likelihood of Uncle Sam's default is low.
But the polarization of Congress is so strong that a technical fault lasting a few hours cannot be ruled out.
The event would be so serious that the priorities of the Fed would be turned upside down.
Instead of starting a tightening of its monetary policy, it should on the contrary once again play firefighters by flooding the markets with liquidity.
For the moment, the Republicans, who control half of the Senate, refuse to help the Democrats vote for this increase, accusing them of wasting public money.
Exceptional circumstances
The next regular meeting of the Fed committee is scheduled for November 2-3.
By then, the debt ceiling issue should be resolved.
The second, less important uncertainty relates to the adoption of the massive plan of 3.5 trillion dollars to increase social spending and tax increases, defended by the White House.
See also United States: GDP growth of 6.6% in the 2nd quarter at an annualized rate
To these exceptional circumstances, we can add two other factors likely to weigh on activity, or even worsen inflation, which has already risen to more than 5% over the last twelve months. This is of course first of all the impact of the Delta variant of Covid-19 on consumption and production. Serious disruptions in supplies to businesses, especially in the auto industry, IT and construction, along with a clear reluctance of millions of Americans to return to work, keep inflation at risk of accelerating inflation. that the Fed is aware of. In addition, the slowdown in growth in China, under the effect of the crisis of over-indebtedness in the real estate sector, is a new factor which Jerome Powell, the boss of the Fed,must also take into account. However, any slowdown in growth would delay the withdrawal of the Fed's exceptional support for the economy.
