Three rate hikes is a good “starting offer” for 2022, could be four if inflation doesn’t decrease – Charles Evans

The President of the Federal Reserve Bank of Chicago, Charles Evans, He said on Thursday that inflation is too high and that monetary policy is not well positioned for this. As a result, the Fed will adjust monetary policy to something closer to neutrality and the Fed firmly expects two to four rate hikes in 2022.

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“The demand for goods has exploded, but the demand for services is sadly below where it was.”

“We have seen wage pressures, price pressures.”

“The prices of goods with really high demand and tight supply have skyrocketed.”

“After we finalize the bond purchases, we will begin to think about how to reduce the balance sheet.”

“Don’t think inflation will stay that high.”

“Inflation will go down because supply chains will improve, demand will drop a little bit as we raise interest rates.”

“The challenges of the workforce will persist for quite some time.”

“The monetary policy stance is ‘wrong’ given high inflation.”

“We need inflation to go back down to 2%.”

“Inflation is likely to be 2.5% by the end of this year.”

“Inflation will be adjusted for ‘real reasons’ like supply chain, business conditions.”

“My forecast in December was in line with 3 rate hikes in 2022.”

“The economy is expected to continue to ‘fuel’ the pandemic.”

“I think the current unacceptably high inflation rates will come down.”

“We need to preserve price stability.”

“Because inflation has been high for longer, we have to take action faster than I thought.”

“We still need patience on the road to removing the accommodation.”

“Unemployment is expected to be around 3.5% by the end of the year.”

“I hope the tide of inflation has turned by the end of the year.”

“I think it will take a couple of years to get rates neutral, but that could be accelerated.”