Thursday, 20 October, 2022

Evans: Rates moving too high could have ‘nonlinear’ impact on economy – Reuters

  • 20-Oct-2022 01:30:00 – EVANS: IF FED PUSHES POLICY RATE MUCH FURTHER THAN PLANNED IT COULD START TO WEIGH ON THE ECONOMY
  • 20-Oct-2022 01:30:00 – EVANS: WORRIED THAT AT SOME POINT RATE INCREASES COULD HAVE “NONLINEAR” IMPACT, WITH BUSINESSES BECOMING MORE PESSIMISTIC
  • 20-Oct-2022 01:30:00 – EVANS: FED “HONING IN” ON THE PROPER LEVEL FOR RESTRICTIVE MONETARY POLICY
  • 20-Oct-2022 01:30:00 – EVANS: FOLLOWING SEPT. CPI STILL SEES A POLICY RATE NEXT YEAR OF 4.5 TO 4.75% RANGE AS APPROPRIATE
  • 20-Oct-2022 01:30:00 – EVANS: DON’T THINK U.S. IS EMBARKING ON A WAGE-PRICE SPIRAL, BUT INFLATION RISK REMAINS TO THE UPSIDE
  • 20-Oct-2022 01:30:00 – EVANS: LOW UNEMPLOYMENT, CONSUMER STRENGTH STILL LEAVES PATH FOR A SOFT LANDING, THOUGH “CLOSER CALL THAN NORMAL”
  • 20-Oct-2022 01:30:00 – EVANS: FED FACING HARD COMMUNICATIONS CHALLENGE AS IT APPROACHES A POINT TO SLOW THE PACE OF RATE INCREASES
  • Interest rates that move too high could have a “nonlinear” impact on the economy as businesses become more pessimistic about the future, Chicago Fed President Charles Evans said on Wednesday, mapping out a case for caution in the central bank’s battle against high inflation.
    The Fed currently projects its target federal funds rate will rise to 4.6% next year, and Evans said that “if we have to increase the path of the fund rate much more … it really does begin to weigh on the economy.”
    “I worry that it’s sort of a nonlinear kind of impact … with businesses becoming very pessimistic and changing their strategies in a sort of notable way,” Evans said in remarks to reporters after an event at the University of Virginia.