Senior economics reporter
Chicago Fed President Charles Evans
Federal Reserve officials share a common forecast of an economy expanding at a solid rate over the next several years, with the unemployment rate declining and inflation edging up a bit above 2%, said Chicago Fed President Charles Evans, on Friday.
“We are more or less singing the same tune,” Evans said, in a speech to the Northeast Indiana Regional Economic Forum in Fort Wayne, In.
The U.S. economy “is firing on all cylinders,” he added.
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Evans said he thinks it is time for the Fed to “return to the conventional monetary policymaking of yesteryear.” This means the central bank can rely on gradual adjustments in interest rates to meet its goals of a healthy labor market and inflation stable near 2%.
The Chicago Fed president said he expects inflation to rise a bit further over the next few years.
On interest rates, Evans said it is “quite normal” to expect the Fed to continue to raise rates until they are “mildly restrictive on growth.
The Fed now projects the benchmark Fed funds rate will move up to 3.1% by the end of 2019 and 3.4% by the end of 2020. This is above the Fed’s estimate of a “neutral” rate level that is somewhere between 2.5% and 3%.
At the moment, the funds rate is in a range between 1.75% and 2%.
Evans will be a voter on the Fed interest-rate committee in 2019.
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