Chicago Federal Reserve President Charles Evans said Thursday he expects the equivalent of six more 25 basis point increases in the central bank’s policy interest rate by the end of the year and three more next year.
Those increases would put the Fed funds rate in a range of 2.75% – 3% by the end of 2023.
“This is a bit over the median longer-run estimate of 2.4%, and so, it represents a slightly restrictive policy stance,” Evans said, in a speech to the Detroit Regional Chamber.
Since last summer, inflation has broadened out to a wide range of goods and services, Evans said.
“This is a signal of more general pressure from aggregate demand on today’s impinged supply,” Evans said.
If the Fed did not respond, the public will come to expect higher inflation, and the Fed “would have even harder work to do to rein it in,” he said.