Fed's Evans sees year

© Reuters. FILE PHOTO: Chicago Federal Reserve Bank President Charles Evans looks on during the Global Interdependence Center Members Delegation Event in Mexico City, Mexico, February 27, 2020. REUTERS/Edgard Garrido/File Photo

By Ann Saphir

(Reuters) -Chicago Federal Reserve Bank President Charles Evans on Tuesday said the Fed could raise its policy target range to 2.25%-2.5% by year end and then take stock of the state of the economy, but if inflation remains high will likely need to hike rates further.

"Probably we are going beyond neutral -- I mean, that's my expectation," Evans said at the Economic Club of New York. Most Fed policymakers estimate neutral to be somewhere between 2.25% and 2.5%.

Evans noted some "positive" developments in the most recent U.S. inflation report, which showed consumer prices rose 8.5% in March, but a slowdown in some goods inflation, including for used cars. If that continues, it could help push broader inflation down.

But, he added, the data could also go the other way, with Russia's invasion of Ukraine and the COVID-19 lockdowns in Shanghai adding to the supply chain problems that have been pushing inflation higher.

"If inflation for some reason began to re-accelerate that would be a cause of great concern," Evans said.

The Fed next meets in May and is widely expected to raise rates by a half percentage point then and again in June before perhaps settling into quarter-point hikes for the rest of the year, a pace that would get rates to Evans' estimated range of neutral by December.

Statement: The content of this article does not represent the views of FTI website. The content is for reference only and does not constitute investment suggestions. Investment is risky, so you should be careful in your choice! If it involves content, copyright and other issues, please contact us and we will make adjustments at the first time!