The Federal Reserve (Fed) has not yet closed the emergency action, which it started in March 2022 after resting on its laurels, to fight inflation despite the great slowdown in prices thanks to its policy monetary the last 17 months. After a pause at the June meeting, which snapped a streak of 10 consecutive hikes, on Wednesday it raised interest rates again by a quarter of a point and the money price remains between 5.25% and a 5.50%, the highest level reached in 22 years.

It remained to be seen whether this decision would be remembered as the central bank’s last step to control inflation inherited from the pandemic era, exacerbated by the war in Ukraine. But those in charge, who yesterday unanimously agreed on the new increase, seemed ready for new increases in interest rates, without specifying. “Meeting by meeting, day by day”, emphasized Jerome Powell in a press conference.

There are three appointments left this year, which will be decided based on the indicators. “It is possible that in September we will agree on another increase or maintain the level”, he clarified.

The other increase could mark the path of the European Central Bank (ECB), which meets today Thursday to take a decision.

The Fed’s monetary policy has caused a slowdown in the economy and an increase in the cost of borrowing. Despite this month’s good news on inflation, which has fallen from a mid-century record high of 9.1% in June 2022 to 3% this year, U.S. central bank governors have had considering that labor hires and economic activity since May have been stronger than they predicted.

So they want to certify that inflation really continues to fall, to reach the 2% target before the job is done. “There is still a long way to go,” said Powell.

The Fed has improved the forecast for the economy, which has gone from “modest” to “moderate” growth. However, and despite the fact that inflation has contracted in recent months, the new rise in rates reflects that the Federal Reserve is still concerned. “I don’t think that monetary policy has been restrictive enough,” insisted Powell, who assured that a recession is no longer in sight.

Core inflation, which excludes the prices of volatile items such as food and energy, had the smallest increase in more than two years last month. But many Fed leaders want assurances that the decline was no fluke, the decision suggests.

Governors are looking for evidence that economic activity, the labor market (surprisingly strong for Powell) and wages are slowing. Some economists suggested that because wage increases lag consumer price growth, a slowdown in inflation could be enough by itself to justify an end to wage increases.

But the International Monetary Fund’s (IMF) latest world economic outlook, published on Tuesday, noted that while the inflationary cycle that began in 2021 has entered its final phase, it warned against over-optimism. “It is clear that the battle against inflation has not yet been won”, he stressed in the document where he asked the central banks not to let their guard down in the fight for price control.

The initiative to return to the charge after the break was an option heavily criticized by progressive lawmakers. Senator Mark Warner, a Democrat, said before hearing the news that it was time to end the increases. “In fact, I’m worried about the rise of a quarter of a point”, he pointed out.

Colleague Elizabeth Warren was even more categorical. The senator advised Powell not to adopt further hikes. “We are already seeing alarming signs, such as rising unemployment among black workers, and if the Fed resumes aggressive policy it could be devastating for our economy, which will disproportionately harm marginalized communities,” he stressed. “If the pause is maintained, we will avoid the threat and the risk of expelling Americans from their jobs,” he added.

There has been substantial economic improvement in the United States, reflected in factors such as June’s consumer confidence index and unemployment at its lowest level in 50 years. But many citizens still don’t feel the economic improvement, polls show.