Federal Reserve Bank of Chicago President Charles Evans remarked on Thursday that the central bank should have started rising interest rates in response to the growing inflation earlier than it did because now it has to continue with that policy.
Speaking at the Illinois Chamber of Commerce Annual Luncheon, Evans warned that "we are headed to 4.5%–4.75% [hike], likely by springtime." He stated the Fed is going to discuss whether the next hike will be by 50 or 75 basis points, with a view to raising the rate by 125 basis points over the next two months.
Still, Evans expressed his confidence that the Fed will be able to bring inflation down with its more "restrictive" policies. He affirmed that "there is a good amount of strength in the US economy," reflected in a good labor market, but also warned that maintaining that will be "more challenging with higher interest rates."
