Charles Evans, Speech: Inflation Dynamics and the Monetary Policy Response

“The current fed funds rate is far below a neutral setting—which, as I mentioned before, I think is in the range of 2-1/4 to 2-1/2 percent. So policy needs substantial repositioning.”

“I favor a front-loaded adjustment in the fed funds rate toward the neutral range. I think front-loading is important to speed up the necessary tightening of financial conditions, as well as for demonstrating our commitment to restrain inflation, thus helping to keep inflationary expectations in check.”

“And given how far policy is below neutral today, the risks to our employment mandate of moving expeditiously seem modest.”

“The FOMC’s half percentage point increase in the funds rate at our May meeting is consistent with this approach, as is the initiation off balance sheet reduction that is coming in June.”