Fed Sets Course for Milder Interest-Rate Rise in February

U.S. Federal Reserve officials are preparing to slow interest-rate increases for the second straight meeting and debate how much higher to raise them after gaining more confidence inflation will ease further this year.

They could begin deliberating at the Jan. 31-Feb. 1 gathering how much more softening in labour demand, spending and inflation they would need to see before pausing rate rises this spring.

In recent public statements and interviews, Fed officials have said slowing the pace of rate increases to a more traditional quarter percentage point would give them more time to assess the impact of their increases so far as they determine where to stop.

Officials called attention to how it takes time for the full effect of higher rates to cool economic activity when they stepped down to a half-point rate rise in December, following four consecutive increases of 0.75 point.

“And that logic is very applicable today,” said Fed Vice Chair Lael Brainard in remarks last week. Raising rates in smaller increments “gives us the ability to absorb more data…and probably better land at a sufficiently restrictive level.”

To combat high inflation last year, the Fed reeled off the most rapid series of rate rises since the early 1980s, raising its benchmark federal-funds rate by 4.25 percentage points. A quarter-point increase next month would bring the rate to a range between 4.5% and 4.75%.

Most Fed officials projected in December the rate would rise to a peak between 5% and 5.25%. That would imply two more quarter-point increases after the likely bump next month. Investors in interest-rate futures markets expect the Fed to make two more quarter-point increases—at the coming meeting and again at the Fed’s subsequent meeting in mid-March, according to CME Group.

The Fed raised rates seven times last year. The likely decision to approve a smaller increase in February reflects officials’ growing confidence that the economy is responding to their efforts to curb demand and bring down inflation.

In recent weeks, government data and business surveys have pointed to a steeper drop-off in manufacturing activity and new orders for service-sector firms as well as a pullback in consumer spending on goods.

The central bank’s rate increases are aimed at slowing inflation by reducing demand, “and there is ample evidence that this is exactly what is going on in the business sector,” Fed governor Christopher Waller, an early and vocal advocate for aggressive rate rises last year, said on Friday. Mr. Waller said he would favour a quarter-point rate rise at the coming meeting.

The Commerce Department is set to release this week the December figures for the Fed’s preferred inflation gauge, the personal-consumption expenditures price index. Excluding food and energy prices, the so-called core PCE index likely rose 4.5% from a year earlier and at a 3.1% three-month annualised rate in December, Ms. Brainard said.

Officials could use their post meeting statement on Feb. 1 to indicate they expect to continue raising rates as they probe where to pause. But they are unlikely to provide precise guidance because coming decisions will depend heavily on new data about the economy.

Some have also suggested that even if they hold rates steady this summer, they will indicate they remain more likely to lift rates than to cut them. After the Fed pauses, “we’ll need to remain flexible and raise rates further if changes in the economic outlook or financial conditions call for it,” said Dallas Fed President Lorie Logan in a recent speech.

At the coming meeting, officials could deliberate two important questions: How long does it take for the full effects of the Fed’s rate rises to influence hiring and overall economic demand? And how much could inflation slow due to other factors such as easing supply-chain bottlenecks or lower costs of fuel and other commodities?

Some could call for delaying any pause if the economy doesn’t weaken much in the months ahead. They think the time between when the Fed raises rates and when they slow the economy is relatively short and the economy will soon feel the worst of any policy-induced slowdown.

Others could argue for a somewhat earlier pause, believing the effects take longer to play out or could be more potent.

Divisions have surfaced. St. Louis Fed President James Bullard said recently he would prefer a larger half-point rate increase at the coming meeting because he doesn’t think rates are high enough to thoroughly beat inflation. “You’d probably have to get over 5% to say with a straight face that we’ve got the right level,” he said in an interview. “Why not go to where we’re supposed to go?…Why stall and not quite get to that level?”

Several of his colleagues have argued for greater flexibility to see if the easing of pandemic- and war-related disruptions brings inflation down more rapidly. As evidence builds that higher rates are working as intended, “why would we try to…really put the clamps down on the economy and really risk losing the good things we have going, like the labor market?” Philadelphia Fed President Patrick Harker said last week. “I just don’t see doing that.”

Fed officials have long expected inflation to fall as supply-chain bottlenecks and commodity-market disruptions eased, but inflation instead rose through the first half of 2022 before moving sideways, according to the Commerce Department’s gauge.

Inflation has declined over the past three months due largely to falling fuel prices and prices of goods, such as used cars. There are signs soaring rents and other housing costs are set to cool notably amid a sharp slowdown in demand, though that isn’t expected to show up in official inflation measures until later this year.

As a result, Fed Chair Jerome Powell and several colleagues have shifted their focus recently toward a narrower subset of labor-intensive services by excluding prices for food, energy, shelter and goods. Inflation in that category has been around 4.4% on both a 12- and three-month basis, up from around 2.3% on average between 2010 and 2019.

Officials believe that category could reveal whether higher wage costs are passing through to consumer prices.

If services inflation is high because paychecks are rising in lockstep with prices, as occurred during the 1970s, then Fed officials would want to see hiring slow more.

But if price increases for services such as restaurant meals, car insurance and airfares instead reflect the ripple, or “pass-through,” effects of some of the global dislocations that are now reversing, services inflation might moderate faster and without as significant a weakening of labor markets.

The recent inflation slowdown, together with the lagging impact of the Fed’s rate rises that could continue to slow the economy, “may provide some reassurance that we are not currently experiencing a 1970s-style wage-price spiral,” said Ms. Brainard.

Fed officials last month revised higher their projections for inflation this year in part due to fears that wage growth was running too high. Signs since then that wage growth is slowing could weigh prominently in the debate over how soon to pause.

Officials will have two more months of several widely watched economic indicators, including on hiring and inflation, before their March 21-22 meeting. They pay close attention to a detailed measure of worker compensation called the employment-cost index, which is set for release on Jan. 31.

The report could offer further confirmation that wage growth slowed at the end of last year.

On Bastille Day, the scent of toasted bread, melting cheese, crêpes and velouté filled a heritage warehouse in Sydney’s Darlinghurst.

Inside Prim Haus, rooms had been transformed into an elegant interpretation of a contemporary French home. Cookware hung alongside market produce, appliances were placed within carefully composed domestic settings and live kitchens turned out French comfort food throughout the afternoon.

The occasion was La Maison de Tefal, an immersive celebration marking 70 years since a French engineer introduced an invention that would fundamentally change home cooking.

Tefal’s story began in 1956 with the commercial launch of what the company describes as the world’s first non-stick frying pan. Seven decades later, the business operates across cookware, kitchen appliances, garment care and floor care in more than 120 countries.

The scale of the modern brand is considerable, but its origins were remarkably domestic.

The invention that started in a French kitchen

In the early 1950s, French engineer Marc Grégoire began experimenting with polytetrafluoroethylene, better known as PTFE, after discovering its unusually effective non-stick properties.

The material was already known within industrial applications. Grégoire’s important contribution was developing a way to bond it securely to an aluminium disc.

According to the company’s history, a conversation with his wife inspired him to apply the process to cookware. The resulting pan allowed meat and eggs to be cooked using less fat, while making the surface considerably easier to clean.

Grégoire patented his non-stick frying-pan concept in 1954 and began selling the finished product in 1956. The new company’s name combined the French words for the two defining materials: Téflon and aluminium.

The attraction was immediate. This was innovation expressed through a simple, recognisable household problem. Food stuck to pans; the new Tefal pan was designed so it would not.

The idea quickly travelled beyond France. Tefal entered the United States in 1961, the same year the company established the production site at Rumilly, near the French Alps. Rumilly would become the centre of Tefal’s cookware expertise and develop an identity as the “frying pan capital of the world”.

The company says more than 35 million cookware items were manufactured at the Rumilly site in 2022. A local museum holds the 500 millionth pan produced by the factory, which came off the line in March 1994.

A Parisian home in the heart of Sydney

La Maison de Tefal translated that industrial history into a more intimate experience.

Held on 14 July, the anniversary used Bastille Day as both a cultural reference and a reminder that Tefal’s identity remains closely connected to French design and engineering.

Prim Haus was arranged as a sequence of domestic environments rather than a conventional product showroom. Guests moved through spaces devoted to cookware, kitchen appliances, garment care and floor care, with each collection presented within the rhythm of a modern home.

A French-market-inspired cooking area formed the social centre of the event. Live stations served croque-monsieur, crêpes and butternut velouté, demonstrating the products through food rather than static displays.

That distinction matters. Tefal’s most successful products have generally been those whose benefit can be understood almost immediately: a pan that releases food, a removable handle that saves cupboard space, an indicator showing when cookware has reached the correct temperature, or an appliance that automates part of a familiar cooking process.

Interactive demonstrations allowed guests to handle the products and see those functions in context. Heritage installations traced the brand’s development, while previews of newer releases connected its first frying pan with the much broader contemporary range.

The anniversary concluded with a champagne toast — an appropriately French punctuation mark for a company whose products have found their way into kitchens around the world.

Seventy years of practical invention

The non-stick frying pan established the operating principle Tefal continues to follow: find an everyday source of friction and develop a practical way to reduce it.

In 1996, the company introduced Ingenio, a modular cookware system built around removable handles. Pans could be stacked more efficiently and moved from cooktop to oven, table and refrigerator without the fixed handle of conventional cookware.

The concept anticipated the pressures that would reshape urban kitchens. As apartments became more compact and storage more valuable, cookware needed to occupy less room and serve more than one function.

Around the beginning of the following decade, Tefal introduced its heat-indicator technology, now known as Thermo-Signal. The circular marker changes appearance when the pan reaches its recommended cooking temperature, turning a technical question into a visual prompt.

In 2006, Tefal expanded the possibilities of countertop cooking with ActiFry. The appliance circulated hot air around food and used little or no added oil, helping establish a product category that would eventually become one of the most competitive areas of the global appliance market.

Innovation also moved beyond cooking. The Freemove cordless steam iron arrived in 2012, removing the cord from the active ironing movement while retaining a powered base.

The company’s current portfolio now extends across multicookers, grills, air fryers, blenders, ice-cream makers, garment steamers, irons and floor-care products. Although the categories are diverse, the common proposition remains convenience grounded in engineering.

The next generation of non-stick cookware

For its 70th year, Tefal has returned to the product that created the brand.

The new Excellence+ cookware range introduces what the company calls FusionCore technology. Tefal describes it as its most durable non-stick coating to date, designed to withstand intensive use and scratching.

As with any durability claim, consumers should follow the manufacturer’s care instructions and consider the applicable warranty rather than interpreting promotional language as a guarantee against every form of damage. But the focus on longer-lasting coatings reflects an important change in buyer expectations.

Convenience is no longer enough on its own. Modern households are increasingly concerned with how long products remain useful, whether they can be repaired and what happens when they reach the end of their working life.

Tefal has responded in several ways. Its Renew cookware uses recycled aluminium and a ceramic non-stick coating, while Groupe SEB has expanded cookware recycling initiatives in international markets. For many small domestic appliances, the group also promotes a 15-year repairability commitment based on parts availability and access to authorised repairers.

The details and warranty periods vary by product and country, so Australian buyers should check the conditions attached to an individual appliance. Nevertheless, repairability represents a meaningful shift from the assumption that a failed countertop appliance should simply be discarded.

From French manufacturer to global household group

Tefal joined Groupe SEB in 1968, giving the company greater international distribution and the resources to expand beyond cookware.

Founded in 1857 and headquartered in France, Groupe SEB has grown into a global small-appliance and cookware business with more than 30 brands. Its portfolio includes All-Clad, Krups, Moulinex, Rowenta, Lagostina and WMF, with operations extending across more than 150 countries.

Within that group, Tefal remains one of the flagship names — and one of the clearest examples of how a single invention can become the foundation for an international consumer brand.

Its longevity has not come from making everyday objects more complicated. The strongest Tefal products do the opposite. They take a small uncertainty, inconvenience or frustration and design it out of the task.

That was the value of Marc Grégoire’s original frying pan. It did not ask people to change what they cooked. It made the existing process easier, more predictable and less difficult to clean afterwards.

Seventy years later, that deceptively modest principle continues to guide the company.

La Maison de Tefal celebrated the products, the French heritage and the anniversary itself. Yet the larger story was visible at every cooking station and demonstration: innovation becomes lasting only when people can use it without having to think about the technology underneath.

For Tefal, the next 70 years will be shaped by new materials, smarter appliances, changing homes and greater expectations around durability. Its challenge will be to keep evolving without losing sight of the insight that started everything — that the most valuable household inventions often solve the most ordinary problems.

Tefal at a glance

Founded: France, 1956
Founder: Engineer Marc Grégoire
Original innovation: Commercialisation of the first non-stick frying pan
Manufacturing heritage: Rumilly, France
Notable innovations: Ingenio, Thermo-Signal, ActiFry and Freemove
Latest cookware development: Excellence+ with FusionCore technology
Parent company: Groupe SEB
International presence: More than 120 countries
Australian website: Tefal Australia