Fed's Evans tells CNBC he's 'a little nervous' of moving too quickly on rates

A top US central bank official sounded a word of caution against moving too quickly on raising interest rates.

In an interview with broadcaster CNBC's 'Squawk Box Europe', the head of the Federal Reserve Bank of Chicago, Charles Evans, reportedly said that he was "a little nervous about exactly that".

Following three consecutive 75 basis point rate hikes, there was already talk of more in order to reach 4.25-4.75% by year end, but "you're not leaving much time to sort of look at each monthly release".

Assuming "no further adverse shocks" he believed the consensus in the Fed remained to reach the "peak" Fed funds rate by March 2023.

If so, then he remained "cautiously" optimistic that the US economy could avoid a recession.

"Goodness knows every time I thought the supply chains were going to improve, that we were going to get auto production up and used car prices down and housing and all of that something has happened.

"So, cautiously optimistic."

As of 1152 BST, Fed funds futures were fully discounting a 25bp rate hike at the 2 November Federal Open Market Committee's meeting that would take the target range for the Fed funds rate to 3.5-3.75% and 68.5% odds of a 50bp hike.

For March 2023, the odds of the target range being at 4.5-4.75% were pegged at 72.4%.