Chicago Fed President Evans predicted that US interest rates would be in the range of 4.25-4.5 percent by the end of the year. This indicates an increase in interest rates by at least 100 basis points.
US Federal Reserve (Fed) Chicago Chairman Charles Evans increased interest rate expectations and predicted that the Fed would need to increase interest rates by at least 100 basis points by the end of the year.
This comment by Evans was interpreted as the bank’s toughening of its steps to combat excessively high inflation.
Evans said he does not think the unemployment figures will be at “recession-like” levels, even though the Fed’s steps to reduce inflation below 2 percent have affected economic growth and employment markets.
“My views are pretty much on par with the median ratings,” Evans said at a summit in London .
The median estimation of the estimates of 19 Fed officials is that the policy rate, which the Fed raised by 75 basis points to the 3-3.25% range last week, will rise to 4.4 percent at the end of the year and will see the level of 4.6 percent next year.
Earlier this month, Evans argued that interest rates would peak at 4 percent.
According to Fed futures contracts compiled by CME Group, investors are currently pricing in a 70 percent rate for the Fed’s policy meeting to be held on November 1-2, with a 75 basis point rate hike.
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