Washington (AFP)

The US economy has started to recover, but too hasty a tightening of monetary conditions could jeopardize this recovery: the US Central Bank (Fed) is expected to hammer home this message on Wednesday, after its monetary policy meeting, will be keeping acting.

Federal Reserve officials resumed their meeting from the previous day at 9:00 a.m. (1:00 p.m. GMT) on Wednesday, a Fed spokeswoman said.

They should maintain a wait-and-see policy, maintaining their support until the US economy has fully recovered from the crisis.

Consumer confidence, real estate sales, manufacturing activity, consumption ... The indicators testifying to this recovery are indeed succeeding.

But the president of the Fed, Jerome Powell, does not stop reminding that it will be necessary to wait until the economy has regained its cruising speed, so that the monetary policy, accommodating today, is tightened, in order not to not weigh on the upturn in employment in particular.

The Federal Reserve wants to achieve sustainable and inclusive full employment, and see inflation exceed the target of 2% per year for a while, then stabilize around this target.

"The Fed should remain resolutely patient," said Krishna Guha, economist for Evercore, in a note.

He expects the Monetary Committee (FOMC) "to judge that it is still too early to think (sic) of reducing (its support for the economy), without any signal, even gradual", on intentions.

According to him, the Fed should stay on this line at least until June, "and we do not expect any clear signal until August".

- Nothing before 2022 -

The US economy is now on the recovery ramp, thanks to the pace of vaccinations and the support provided to households and businesses by the federal government.

The press release to be released on Wednesday "will recognize the progress of the economy since the last Fed meeting: employment, retail sales and the housing market have improved," predicts Diane Swonk, economist for Grant Thornton , in a note.

But she believes Jerome Powell, who will hold a press conference at 6.30 p.m. GMT on Wednesday, "will focus on how far we are from a full recovery."

While nearly a million jobs were created in March, "it would take more than a year" at this rate "to recover what was lost due to the crisis and bring the economy back on track." pre-pandemic, notes the economist.

Interest rates should therefore remain in the 0 to 0.25% range at least until 2022. Asset purchases should be slowed down beforehand, but not in the near future.

- "Look in the mirror" -

"Fed officials have learned that the longer they let the expansion last, the better the outcomes for the most marginalized workers," says Swonk.

The Fed "looked in the mirror and realized (its) past mistakes; the preemptive rate hikes left a residual chill in the economy. The inflation they anticipated never happened." she observes.

Fears of too high inflation stirred the markets at the start of the year, but now seem to be dissipating, with a broad consensus on the temporary nature of this price increase.

The Fed meeting is being held on the eve of the release of important economic indicators.

On Thursday, the GDP growth of the United States for the first quarter of 2021 will be announced. Analysts forecast an expansion of 6.5% at an annualized rate.

In the fourth quarter of 2020, the Gross Domestic Product had increased by 4%.

But for the year as a whole, GDP had receded 3.5%, the sharpest contraction since 1946.

And on Friday, it is PCE inflation, a measure used by the Fed, for the month of March, which is expected.

The meeting will not give rise to new economic forecasts.

These are expected at the next Monetary Committee meeting on June 15 and 16.

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