More from retiring Chicago Fed Pres. Charlie Evans:
- Fed needs to see inflation coming down
- inflation is much more persistent than the Fed thought it would be. Clock is still waiting to start
- now much difference in policy pass being laid out
- the important thing is to get and inappropriately restrictive rate and watch how economy evolves
- JOLTs data is trending in the right direction, but vacancies remain high
- Still waiting for convincing evidence that inflation is
- FOMC is very clear in how it is clustered around a rate in the range of 4.5% next year
- risk of a downturn in Europe is quite strong
Evans will be retiring at the end of the year. His comments are consistent with the Fed's stance that they will continue to lead rates toward restrictive levels. That includes 4.5% by the end of the year and 4.75% in the 1st quarter. It seems the Fed will then pause to see what happens. That is what is going to happen.
In a way, it is not necessarily about data right now. It is about getting policy rates to restrictive, and then seeing what happens. The stronger jobs data did not dissuade that argument. The CPI data this week with core rates expected to rise is also expected to support the continued Fed tightening arguments (but it seems not to matter). The Fed erred in keeping rates too low, and now it is focused on killing inflation that was created.