Gita Gopinath, First Deputy Managing Director of the International Monetary Fund (IMF), said that U.S. inflation has not improved yet. She believes the Fed is too early to declare victory in the fight against rising prices and has urged the central bank to keep raising rates this year.
Gita Gopinath said it was important for the Fed to "maintain a restrictive monetary policy" until there was a "very clear, durable slowdown in inflation" in wages and sectors not related to food or energy. "If you look at the labor market indicators, if you look at the very tricky components of inflation, such as service sector inflation, I think it's clear that inflation in the U.S. hasn't turned around," she added.
On Wednesday, the Labor Department's Job Openings and Labor Turnover Survey (JOLTS) showed job openings fell to 10.46 million in November from 10.51 million in October, but the figure was higher than the estimates of all economists polled by the media. . The figures suggest that the job market remains tight, with demand from employers far outpacing supply, a persistent imbalance that continues to put upward pressure on wages, which Fed Chairman Jerome Powell has emphasized as key to the path of inflation. A resilient labor market could tip the Fed toward more restrictive policy in the months ahead.
In addition, the minutes of the Federal Reserve's December meeting released on Wednesday showed that Fed officials agreed that the central bank now needs to balance the risks of fighting price pressures with an excessive slowdown in the economy. At the same time, officials said they saw the risk as more of a premature easing of policy, allowing inflation to continue to soar.