MNI BRIEF: Fed ‘Honing In' On Appropriate Level Of Rates-Evans

The Federal Reserve’s aggressive interest rate hikes put it closer to the appropriate level of monetary tightness needed to bring inflation down, Chicago Fed President Charles Evans said Wednesday, adding he still sees the September SEP as a good guide to the peak of rates

“As we keep going up 75 takes it much closer to what I think is the peak in the SEP, I’m not sure I would describe it at this point as frontloading, we’re moving towards more restrictiveness,” Evans told reporters in a briefing. “Now we’re honing in on what I think is an appropriate level of restrictiveness.”

Communicating a slowdown in the pace of hikes will be a challenge for policymakers, he said. “There’s more communication that has to take place. How you get the market to digest these different paces is going to be an important issue for communication.”

Ex-officials told MNI this week they see fed funds peaking at 5% or higher after core CPI hit a new 40-year high of 6.5% in September.