Fed’s Evans: Hiking under 2.5% by March 2023 gives Fed “optionality”

Chicago Fed President and FOMC member Charles Evans on Friday said that raising interest rates to just under 2.5% by March 2023 gives the Fed “optionality”. It is not a big risk if that rate-hike path includes “some” 50 bps hikes to get to the neutral rate sooner.

Monthly inflation reports should start to be lower in the second half of 2022, Evans said, but he added that the Fed’s rhetoric won’t change until 2023. Evans said that the latest US jobs report is not indicative of the economy overheating.