Fed of Chicago: The Fed may raise rates four times this year because of inflationary pressures

Chicago Fed Governor Charles Evans said the foci of the Federal Open Market Committee's forecast for the number of rate hikes this year is 3, but if inflation data doesn't improve fast enough, a four-time rate hike is not impossible.

Evans said during an audience Q&A session, "The median FOMC forecast for December is three rate hikes, and I agree with that prediction."

On whether to raise interest rates in March, "I don't think it's possible to judge yet."

"March is expected to be a real meeting and we will seriously consider taking action"

"If the inflation data doesn't improve soon, you might have to raise interest rates four times."

"From the first rate hike to our decision to allow balance sheet reduction, the interval will be shorter than before. We expect a decision soon."

"From a long-term framework, we should actively work to reduce the employment gap, and real improvements in supply chains will help combat inflation."

"Once the supply chain reacts, we'll see how much too loose monetary policy is driving inflation, and we'll be able to see how widespread inflation is."

Asked if the FOMC might decide at its January meeting to halt asset purchases by March, he said: "I have to listen to the arguments. I'm not sure the data we've seen since the December meeting will support adjustments to the minus plan at the January meeting. We have to meet and discuss this together."

He expects inflation to be just below 2.5 percent by the end of the year, and monetary policy "may contribute a little bit to a decline in inflation at the end of the year, but not much," with the data improving mainly due to healthier supply chains.

This article originated from the financial world