Charles Evans, Interview: Illinois Chamber of Commerce Annual Luncheon

“We have just done 300 basis points in seven months. So we have very quickly expeditiously adjusted the stance of monetary policy. If you are of the opinion that we got off to a late start, and looking back, I can see we should have started earlier, at the time it seemed okay, but we have very quickly turned things around. And we’ve indicated through our communications, our projections of where the funds rate’s supposed to end up this year and next year, that we have further to go. We look, to me, according to our reports, headed for four and a half to four and three quarters percent, by sometime next year, which given how fast we’ve been raising interest rates is likely to be the springtime. That is a lot.”

“Our balance sheet will always grow with the economy, so we’re never going back to $800 billion of treasuries, where we were in August 2007, about the time I became president. But it’s going to be well north of that. But we will be winding it down. At the moment, we are letting assets roll off, and there’s a question as to what will be the pace, how long it’ll take, I believe that this will be completed within a couple, three years.”

“If you look at the median participant who submitted projections for where our federal funds rate will end at the end of this year, there are only two meetings, they’re looking for 125 basis points of increase. So in two meetings, how do you do 125 basis points of increase? Well, you can sort make that choice yourself.”

“Most recently, there’s been a tremendous amount of cohesiveness to everybody’s views, just because we realized we were behind, we had a long ways to go, you know we have to be expeditious, and we want to get to a certain place either by the end of this year or next spring. It’s pretty clear, and everybody’s on board.”