[Asia Economy Reporter Donghoon Jeong] Charles Evans, President of the Chicago Federal Reserve Bank and a dovish member of the U.S. Federal Reserve (Fed), argued that the pace of interest rate hikes should be slowed down until July or September.
According to major foreign media on the 17th (local time), President Evans attended the New York University Money Market Tier event and said, "Preemptive interest rate hikes are necessary to accelerate financial tightening," but also expressed the need to slow down the pace.
He stated that the benchmark interest rate likely needs to be raised above the neutral level that does not affect the economy, but he feels uneasy about raising it that high.
This is because it is difficult to determine exactly at what level the benchmark interest rate will hinder economic growth, and other risks may arise unexpectedly.
For this reason, he prefers a slower pace rather than a 'big step' increase of 0.5 percentage points, which is double the usual hike.
President Evans expects the Fed to discuss such gradual increases in July and September, complete a 0.5 percentage point hike by December, and then make at least several 0.25 percentage point hikes.
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