Chicago Federal Reserve President Charles Evans said the central bank is sticking to its commitment to bring down inflation, even if it means people losing their jobs.
Speaking three weeks before the Fed is expected to approve its fourth consecutive rate hike of 0.75 percentage points, the central bank official told CNBC that he hopes to minimize economic damage.
“At the end of the day, inflation is the most important thing to get under control. It’s job-one,” Evans said during a live “Squawk on the Street” interview. “Price stability sets the stage for stronger growth in the future.”
Markets will get another look at the producer and consumer price indices later this week. Both have shown increases in the cost of living near their highest levels in more than 40 years.
On the employment front, the Bureau of Labor Statistics reported on Friday that non-farm payrolls rose 263,000 in Septemberwhile the unemployment rate fell to 3.5%, tied for the lowest level since late 1969. However, Fed officials, including Chairman Jerome Powell, have warned that they expect “some pain” from the Fed’s inflation-fighting efforts, which could include higher levels of unemployment.
“If unemployment goes up, that’s unfortunate. If it goes up a lot, it’s really, really hard,” Evans said. “But price stability makes the future better.”
The Fed faced a renewed onslaught of criticism Monday from ARK Investment Management founder Cathie Wood. IN an open letter to the politiciansThe ETF manager said she is concerned that rate hikes are based on retrospective data and could send the economy into a “deflationary bust.”
Evans said he sees some signs that inflation is easing as supply chain pressure eases. He advocated a policy stance where the Fed gets interest rates to a restrictive level, after which it can monitor the impact.
Evans is a non-voter on the rate-setting Federal Open Market Committee and has said he will leave his post early in 2023.