Chicago Federal Reserve Bank President Charles Evans looks on during an event in Mexico City, on Feb. 27, 2020.EDGARD GARRIDO/Reuters
Chicago Federal Reserve President Charles Evans on Friday repeated his view that the U.S. central bank will likely need to make seven quarter-of-a-percentage-point interest rate hikes this year to rein in inflation, but signalled that his view may well change.
“Given the great deal of uncertainty we face today, I am well aware that developments may transpire in a way that would cause me to alter my assessment,” Evans said in remarks prepared for delivery to the Prairie State College Foundation.
Most of the text was an exact repeat of a speech Evans gave on March 24 in Detroit, when he called for “timely” rate hikes and said policy-makers “need to be cautious, humble and nimble as we navigate the course ahead.”
A week earlier the Fed raised rates for the first time in three years and signalled more hikes were coming, likely on the same rate-hike path that Evans said Friday was his “baseline assessment.” That path would bring the Fed’s policy rate to a range of 1.75 per cent-2 per cent by year-end, and to 2.5 per cent-2.75 per cent by the end of next year.
But since the Fed’s March meeting, with data pointing to an already tight labour market tightening even further and inflation surging to a 40-year high, policy-makers have sounded increasingly ready to be more aggressive.
On Friday, Evans made a point of underscoring his personal uncertainty about the proper path of policy.
“As we move through the year, we will certainly learn more and will be prepared to adjust policy as needed,” he said.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.