Sundaymail Editor
The U.S. Federal Reserve will need to raise interest rates by at least another percentage point this year, Chicago Fed President Charles Evans said on Tuesday, a more aggressive stance than he has previously embraced that underscores the central bank’s hardening resolve to quash too-high inflation.
Evans also said that he does not see “recession-like” unemployment rate numbers ahead, even as the Fed’s actions result in below-trend economic growth and a softening in the labor market in order to bring inflation back down to the central bank’s 2 percent goal.
“My own viewpoint is roughly in line with the median assessment,” Evans said in prepared remarks to the Official Monetary and Financial Institutions Forum in London, referencing the Fed’s latest quarterly summary of policymaker projections.
These showed the Fed expects to raise the policy rate, now in the 3 percent to 3.25 percent range after last week’s 75-basis-point increase, to 4.4 percent by the end of this year and to 4.6 percent by the end of next year, according to the median estimate of all 19 Fed policymakers. – Reuters
Bongani Ndlovu
Online Reporter