MEDI1TV Afrique : Fed-baisse du taux directeur : vers un assouplissement de la politique monétaire - 23/09/2024
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00:00Ladies and gentlemen, good morning and welcome to Focus Economique.
00:14The US Central Bank has lowered its interest rates by 0.5%, a first since 2020.
00:21The beginning of a process, said Jerome Powell, president of the Fed,
00:26which plans to lower its rates by 0.5% again by the end of the year.
00:32The US economy is therefore in a phase of progress.
00:36A decrease in rates that comes a few days before the meeting of the Central Bank Council,
00:42scheduled for September 24.
00:44How will this recovery of the US economy impact other economies around the world?
00:50We are talking about it today with Mr. Mohamed Jadri.
00:53Mr. Economist, thank you for accepting our invitation.
00:56Hello, it's always a pleasure.
00:58So how do you explain this decision of the Fed to lower its rates by 0.5%?
01:04First of all, we must start with two essential words.
01:08This is good news.
01:09This is a relief for the US economy and for the global economy in general,
01:14because it is the first since 2020.
01:17And it is the first time, once again, after 11 successive increases,
01:23from March 2021 to July 2023.
01:26As a result, there was a stagnation.
01:28But it is the first time that the US Federal Bank is beginning to lower its rates.
01:33And once again, even the governor of the Federal Bank said
01:37that there will be a second decrease by the end of the year.
01:42This is a first psychological relief,
01:44because normally it will impact the purchasing power of the Americans
01:50and it will restart the US economy.
01:53Why? For two essential reasons.
01:55Firstly, because the inflation rate is today in adequate rates with the US economy.
02:00It is between 2% and 3%.
02:02So it's not 9% and 8% that were after post-COVID.
02:06And also because there is an unemployment rate of 4.44%.
02:10So the Americans want to restart the economy once again.
02:15An unemployment rate that is still rising.
02:18Absolutely. 4.4% in the US is rising.
02:23In addition to that, there are even people who speak of an economic regression.
02:27This is why the Federal Bank made this first decrease
02:30which will be followed by a second decrease by the end of the year.
02:34This is a relief, I repeat once again,
02:38it is a psychological relief because people will start to think about reinvesting
02:43once again by the end of the year or in 2025.
02:46But the real impact of this decrease of the Federal Bank's autodirector
02:50will take place from the second half of 2025.
02:54So we'll see in about a year.
02:57So optimistic projections.
02:59You said it, a psychological relief for the Americans.
03:02A first since 2020.
03:04Are we in a new phase of the American economy?
03:07An official post-COVID-19 and a restart that we should expect?
03:13Absolutely.
03:14When we look at the curve of the Iranian autodirector in the last 24 years,
03:20we see that it is still the same story.
03:22In 2000-2001, there was a fairly steep increase.
03:26We got to 5.25% and then there was a decrease to 0.25%.
03:31The same thing was repeated again in 2007-2008.
03:35And today we also see that the peak was reached in July 2000-2023 with 5.5%.
03:42Just to remind people, 5.25% is the rate with which commercial banks
03:49at the American level borrow money from the central bank.
03:53That is, they also borrow their loans at a rate of 7% or 8%.
03:59So today we are talking about a second phase, a decrease in the curve.
04:03And we remember that in February-January 2020, we were at 0.25%.
04:08That is, the central bank borrows money from commercial banks for free.
04:14A decrease in the curve, but we have not yet returned to the pre-COVID.
04:19We are still very far from that.
04:21It is the beginning of the decrease in the curve that will be continued by the end of the year.
04:25And I am convinced that there will still be other decreases in 2025.
04:30Except today, because it is a world where there is a lack of visibility.
04:35So there are strong rumors for wars in the Middle East, between Israel, between Iran, etc.
04:42So if there were geopolitical tensions in the region, it would be something else.
04:49This is an optimistic projection, but we are still in the blur.
04:53Exactly.
04:54We are waiting for the international conjuncture in terms of global geopolitics.
05:00The FED is trying to bring monetary policy to a level closer to the neutral rate.
05:06Is this something that is feasible?
05:09And is it necessary to limit the risks of a recession?
05:14Of course, because today there are two big problems in the United States.
05:19The first problem is through consumers, because people want to buy goods and services,
05:24but access to financing is expensive.
05:27So people will bring back their investments or their consumption of goods and services.
05:32And on the other hand, even for entrepreneurs,
05:35because someone who wants to invest in real estate or services or goods,
05:42access to financing is quite expensive.
05:44So this reduction of the rate is both beneficial for consumers, but also for entrepreneurs.
05:50So restarting growth.
05:52And in terms of purchasing power, you said it earlier,
05:55this reduction in the rate will certainly impact purchasing power.
05:58What are the expectations for Americans?
06:01Of course, the expectations, as I just said,
06:05will only have a psychological effect today.
06:09Because the rates, it is true that we have started to decrease,
06:12but when we compare, for example, the rate in the United States with the rate here in Morocco,
06:17there is no comparison.
06:20Because in the United States we are talking about 4.75% and 5%,
06:24while in Morocco we are today at 2.75%.
06:27So it's already double.
06:29But people will say that this is the time to buy, this is the time to invest.
06:35So it will have a psychological impact.
06:38But the reduction should continue in the coming months
06:42to reach adequate rates with the American economy,
06:45up to 2% or 3% at least in 2025,
06:49so that we return to more advantageous rates,
06:52that is, between 0.25% and 0.75%,
06:55but it will be in 2026 because we decrease by 0.5% once a quarter.
07:02So it will at least restart the dynamics, at least of investment,
07:06in the psychological level.
07:08And how will this decrease in rates also impact jobs in the United States?
07:14We know that the unemployment rate is high.
07:17Of course, of course.
07:18Among the main reasons that have pushed the US Federal Bank to decrease the rate
07:24is to attack a little bit the unemployment rate, which is quite high proportionally.
07:29Because we compare 4.4% in the United States with 14% in Morocco,
07:33so there is no image.
07:36But in the United States, the monetary policy is made to control inflation on the one hand,
07:44but also to go full employment.
07:46So that's why this decrease will impact entrepreneurs,
07:50companies to invest, to hire people.
07:53And I'm sure that in the coming months, that is, from 2025,
07:57the unemployment rate in the United States will decrease significantly.
08:01So if we had to do a little bit of the economic assessment of the last few years
08:08with Joe Biden as president,
08:11could we say that the assessment is finally positive with this decrease in rates?
08:16And this decision, in your opinion, can it impact the campaign,
08:21the election, so today in progress, and the scrutin of November next?
08:27Already the decision of the US Federal Bank had a big debate in the United States
08:32because the Republicans attacked the Federal Bank,
08:35and especially the governor of the US Bank,
08:37because they said that he was giving advantages to Kamala Harris
08:42at the expense of Donald Trump, the other candidate of the Republican Party.
08:47But the governor said that he was doing the right thing for the American people
08:53at the right time.
08:55And it's just a coincidence because today,
08:57the decision to decrease the director's rate,
09:01because inflation is now in comfortable areas for the American economy,
09:08even at the international level, even the European Central Bank,
09:11has decreased since the last quarter of 2024.
09:16So it's true, but it's going to give a push for the campaign.
09:22Of course, it's going to give a push for Kamala Harris' campaign,
09:26when we see that the elections are in two months,
09:29and even worse for the Republicans,
09:31because the US Central Bank says that there will be a second decrease before the end of 2024.
09:39So, an announcement of this rate, which also occurs a few days before the Council,
09:47the meeting of the Council of the Moroccan Bank,
09:50how can this announcement of this decrease in rates influence,
09:55or what effect can it have on this meeting?
09:58Of course, because the decisions of the Moroccan Central Bank,
10:03the Moroccan Bank, are always taken into consideration
10:07the repercussions of the international economy,
10:10but also the economy at the internal level.
10:14So today, there are a lot of essential elements that are positive for the Moroccan economy.
10:19First, there is a bias trend at the international level,
10:22there is the US Federal Bank, which has decreased for the first time since 2020,
10:26there is the European Central Bank, which has started to decrease since the second quarter of 2024,
10:32and even the Al-Malibu Bank has started to decrease since the last July meeting.
10:39So, normally, in principle, when we see the barrel rate and the cost of raw materials at the international level,
10:45I think that the meeting of September 24, next week,
10:49there will be a second decrease, but a small decrease of 0.25% so that we are at 2.5%.
10:58It will not be exactly the same scenario, then, depending on the projections.
11:03Very well, you mentioned the cost of raw materials at the international level,
11:08in relation to this, have these costs stabilized?
11:11Then, the cost of oil also, which remains fluctuating.
11:14So, in addition to the international conjuncture that we talked about at the beginning of the show,
11:19linked to geopolitical events, how can we place this announcement in this context today,
11:25where we do not really know how everything will unfold?
11:30No, of course, we take into account the cost of raw materials at an interesting level,
11:34especially the barrel of oil.
11:36This is the reason why we want to talk about a growth rate of 4.6% in 2025.
11:43Why? Because today, the barrel rate is at adequate levels with the Moroccan economy.
11:48We must not forget that the energy bill of 2023 was worth $15 billion.
11:54This is huge for an emerging economy like the Moroccan economy.
11:57Today, we are below $70, which is very advantageous for the Moroccan economy
12:02because the production cost and the return cost will be adequate with the Moroccan economy.
12:07And also, the other raw materials, cereals, iron, copper, aluminum, etc.
12:13Today, we are far from the inflationary wave that started in April 2021.
12:18So, today, the international context is favorable, but still, I repeat once again,
12:24there is this lack of visibility because there are dramatic tensions on the left
12:29that can shake things up by 180 degrees.
12:34We will remember this international context that is favorable to optimistic projections.
12:40Thank you, Mr. Mahmoud Jaderi.
12:42It is a pleasure to have you with us today.
12:44I remind you that you are an economist.
12:48This is the end of Economic Focus for today.
12:50Thank you for your loyalty.
12:52We will meet again tomorrow with a new guest.
12:54Have a very good day.