Chicago Federal Reserve Governor Evans Says Labor Market is Downright Tight

The Chicago Federal Reserve Governor Evans, a renowned Fed dribbler in prepared notes on inflation and employment said less accommodative monetary policy will dampen very high labor demand. He believes inflation will fall substantially over the next couple of years. He said the labor market is a downright tight Inflation clearly much too high. Nothing new there. He spoke just ahead of the latest 20-year treasury auction.

“I expect it will be necessary to bring rates up a good deal more over the coming months in order to return inflation to the Committee’s 2 percent average inflation target.” Evans said in remarks prepared for delivery in Cedar Rapids, Iowa for the Corridor Business Journal’s mid-year economic review.

Evans Highlights

  • Will need to raise interest rates a good deal more overcoming month
  • Risks to the downside.
  • We must be watchful and ready to adjust our policy stance if changes in economic circumstances dictate
  • Inflation clearly much too high
  • Bad news on inflation was an important consideration and on support for 75 basis point hike in June
  • Own viewpoint roughly in line with expectations for policy rate of 3.25% to 3.5% and end of year and 3.8% at end of 2023
  • Less accommodative monetary policy will dampen very high labor demand
  • Inflation will call substantially over next couple of years
  • Labor market is a downright tight

Source: Federal Reserve

From the TradersCommunity Research Desk