Federal Reserve officials are preparing to roll out another supersized interest-rate increase in early November, when they will also likely debate tactics for completing the most aggressive tightening cycle in four decades.
Officials have been rapidly raising rates after being slow to tackle inflation that proved more persistent than expected. But with rates now approaching levels that could weigh on economic growth, policymakers are beginning to lay the groundwork for shifting to smaller moves that get them to the finish line without going too far, while leaving the door open to going further if inflation doesn’t abate.
“Front loading was a good thing,” Chicago Fed President Charles Evans told a community banking symposium hosted jointly by his bank Friday, reminding his audience that rates were down near zero in March. “But overshooting is costly too, and there is great uncertainty about how restrictive policy must actually become. So this is going to put a premium on the strategy of getting to a place and a level where policy can plan to rest and evaluate.”
