Note that the December meeting will be the last for Evans before his retirement.

  • There’s plenty of trail capability, even with smaller increments
  • Inflation lagging behind the real economy, it takes time to assess
  • A 50 basis point hike is still a very big hike
  • Inflation reports are still likely to be disappointing
  • If inflation is not favorable and you still want to increase quickly “you can do 50 basis points repeatedly”
  • Fed funds peak likely to be revised “slightly higher” in December
  • The Fed is looking for the right level of restriction

This is the first indication of how much the Fed plans to hike in 2023. “Slightly higher” could put anything in the 4.75-5.50% range at stake. The Fed funds market is at 5.10%.