Fed’s Evans prefers to rate hike pause

Federal Reserve Bank of Chicago President Charles Evans said, on Thursday, that policymakers could deliver a third straight jumbo increase in interest ratesat the next FOMC meeting on September 20-21, but he is opened minded between a 50 or 75 basis point hike.

The US dollar index and shorter-dated US Treasury yields rose on Thursday following Federal Reserve Chair Jerome Powell’s comments that the central bank was “strongly committed” to controlling inflation.

The DXY index, which measures the greenback vs. a basket of currencies has travelled between a low of 109.334 and a high of 110.243.

Key Comments

”I’m open-minded on 50 bps or 75 bps rate hike for Sept.”

”Will monitor breadth of inflation, and if anything surprises on wages may need to get to peak rate sooner.”

”Signs of inflation cooling won’t change need to get to peak fed funds rate of 4%, but maybe not as soon.”

”Don’t have heartburn about getting to peak 3.75%-4% fed funds range by year-end or January.”

”Dollar strength shows the confidence we’ll get inflation back down.”

”Hopeful that unemployment won’t do all the work getting inflation down; will be special factors, supply chains.”

”Need to be confident inflation is heading back down to our 2% objective.”

” Would prefer to raise rates and hold for some time, rather than raise too far and then have to cut.”