Fed likely to need to raise interest rates ‘a bit beyond neutral’: Evans

(Reuters) – The Federal Reserve will likely have to raise interest rates past the neutral rate in order to keep the economy on a sustainable growth path and inflation around target, Chicago Federal Reserve Bank President Charles Evans said on Thursday.

“Given the outlook today, I believe this will entail moving policy first toward a neutral setting and then likely a bit beyond neutral,” Evans said in a speech originally intended to be delivered to a conference earlier this week in Argentina and released on Thursday.

Evans does not have a vote on the central bank’s rate-setting committee this year but fully participates in deliberations.

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