Evans, the governor of the Federal Reserve Bank of Chicago, said monetary authorities should raise the policy rate to near “neutral” by the end of the year. He suggests raising rates by 0.25 points up to seven times this year.
In an interview with the US Economic Affairs Bureau CNBC on the 4th, the governor said, “A 25 basis point (bp, 1bp = 0.01%) increase at each meeting is a rate hike that I think is essential,” regarding the target range for the federal funds rate. However, if it is actually implemented, the range will be 1.75-2% at the end of the year. ” “It’s close enough to neutral rates and we can take swift action if needed. Depending on the situation, we might keep the policy as it is or return it to its previous state.” Stated.
Neutral interest rates in monetary policy are theoretical levels that do not accelerate or slow the economy. According to the median forecast of Federal Open Market Committee (FOMC) participants as of December last year, the neutral interest rate is estimated to be around 2.5%.
According to the February US employment statistics released this morning, the number of non-farm payrolls increased by 678,000 from the previous month. Employment growth was seen in a wide range of areas. The unemployment rate has dropped to 3.8%. Wage growth has slowed. Governor Evans said in an interview following the statistics were released.
US Employees Accelerate to More than Expected Increase by 678,000-Wage Growth Slows (1)
“It’s good news,” he said of employment statistics. “It doesn’t really change the path of monetary policy that the Federal Reserve Chairman Jerome Powell recently set out.”
Original title:Evans Says Fed Should Raise Rates to Near 2% by End of 2022 (1)(excerpt)
