Chicago Fed President Charles Evans said on Tuesday that a 50 basis points rate hike would be a reasonable assessment for the September policy meeting if inflation does not improve, as reported by Reuters.

Additional takeaways

"75 bps increase is also okay; I doubt a 100 bps hike is called for."

"I am still hopeful we can do 50 bps hike in September and then continue with 25 bps rate hikes until the beginning of the second quarter of 2023."

"There’s still a reasonable expectation that monetary tightening into next year will lead to a restrictive setting but allow for a reasonably strong labor market."

"I see policy rate between 3.75 and 4% by end of next year."

"I see path to unemployment rate remaining below 4.5% with economic growth near trend."

"If we don’t see improvement in inflation over next few months, we may have to rethink rate path a little higher."

"It is possible we get a soft landing, but there are a lot of risks."

"A recession is unhealthy; so is such high inflation."

"Important to keep eye on where monetary policy has to go over medium term."

"Wouldn’t be surprising for unemployment rate to rise to region of 4.25%."

"I think unemployment rate will stay below 4% this year."

"I have downgraded my economic growth predictions somewhat for this year, probably looking at 1% or lower."

"We need to start getting less ugly inflation reports soon."

"We have to be mindful that inflationary pressures may be broadening out."

"A gentler incline once we have got slightly restrictive level would be a good path, but depends on the data."

Market reaction

The US Dollar Index showed no immediate reaction to these comments and was last seen rising 0.45% on the day at 105.88.

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