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Fed Should Raise Rates Near to 2% This Year, Evans Says

  • Evans’ proposal implies up to seven 25 basis-point moves
  • Chicago Fed leader spoke after strong February jobs report
Charles Evans
Charles EvansPhotographer: Justin Chin/Bloomberg
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Federal Reserve Bank of Chicago President Charles Evans said the central bank should increase interest rates to close to its “neutral” setting this year, implying as many as seven quarter-point hikes.

“If we were to do 25 basis points at each meeting, which may be more than I think is essential, but if we did it at each meeting, we’ll end the year at 1.75% to 2%,” he told CNBC in an interview Friday, referring to the target range for the Fed’s benchmark overnight policy rate. “That is close enough to neutral that we could take quick action if it were necessary. Or we could stick or we could back off if that is what the case was.”