Chicago Fed President Charles Evans said, “we can bring inflation down relatively quickly while also avoiding a recession.” He pointed to Fed’s projections that unemployment rate will rise form current 3.5% to 4.4% by the end of next year. Core inflation will dropped from August’s 6.2 to 2.8% then.
That’s a “pretty good looking soft landing,” he said. “While this does represent a noticeably softer labor market when compared with today’s, these certainly are not recession-like numbers.”
Evans saw federal funds rising to “a bit above 4.5%” early next year, then “remaining at this level for some time.”
