Fed’s Evans: need to get policy rate to a bit above 4.5%, then hold
2022.10.21 16:03
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© Reuters. FILE PHOTO: Chicago Federal Reserve Bank President Charles Evans looks on during the Global Interdependence Center Members Delegation Event in Mexico City, Mexico, February 27, 2020. REUTERS/Edgard Garrido
(Reuters) – Chicago Federal Reserve Bank President Charles Evans on Friday repeated his view that the U.S. central bank ought to get policy to “a bit above” 4.5% by early next year and then hold it there so as to restrain growth and bring down too-high inflation.
“Front-loading was a good thing, given how far below neutral rates were” as recently as March, when they were near zero, Evans told the regional Fed bank’s Community Bankers (NASDAQ:) Symposium earlier Friday. “But overshooting is costly, too, and there is great uncertainty about how restrictive policy must actually become, so this is going to put a premium on the strategy of getting to a place and a level where policy can plan to rest and evaluate data and developments.”
The remarks were shortened version of similar comments given two weeks ago; the bank posted a video of Evans’ presentation on its website.
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