December 8, 2022

Brighton Journal

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Fed Chairman Evans is concerned about going too far and too quickly in raising interest rates

Fed Chairman Evans is concerned about going too far and too quickly in raising interest rates

Chicago Federal Reserve Chairman Charles Evans said he was concerned that the US central bank would raise interest rates too quickly in its quest to address hyperinflation.

Speaking to CNBC’s “Squawk Box Europe” on Tuesday, Evans said he remains “cautiously optimistic” that the US economy can avoid a recession – provided there are no further external shocks.

His comments come shortly after a group of senior Federal Reserve officials They said they would continue to prioritize the fight against inflationwhich is currently approaching its highest levels since the early 1980s.

central bank Standard interest rate hike By three-quarters of a percentage point earlier this month, the third consecutive increase of three-quarters of a point.

Fed officials also indicated that they will continue to raise interest rates above the current range of 3% to 3.25%.

Asked about investor concerns that the Fed doesn’t seem to be waiting long enough to adequately assess the impact of a rate hike, Evans replied, “Well, I’m a little nervous about that exactly.”

“There are delays in monetary policy and we have moved quickly. We have had three increases of 75 basis points in a row and there is talk of more to get to 4.25% to 4.5% by the end of the year, you don’t leave a lot of time to kind of look at each monthly release,” Evans said.

Peak money rate

Fed's Charles Evans says there are fears of global inflation 'wider'

“Again, I still think our consensus, average forecast, is to reach the money rate peak by March – assuming there are no further adverse shocks. And if things improve, we could probably do less, but I think we’re headed for a peak money rate. money,” Evans said.

“This provides a path to employment, you know, settling into something that is still not stagnant, but there may be shocks, and there may be other difficulties,” he continued.

“Goodness knows every time I thought supply chains would improve, that we would raise car production and lower used car prices and housing and all of that happened. So, cautiously optimistic.”

CNBC’s Jeff Cox contributed to this report.

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