By Dan Burns

(Reuters) – Chicago Federal Reserve Bank President Charles Evans said Tuesday that he supported a first burst in monetary policy tightening and then a slower pace of rate increases to give time for inflation analysis and to evaluate the effect of higher borrowing costs upon the labor market.

Evans made the following remarks in preparation for presentation to Money Marketeers in New York University: “I believe front-loading can speed up financial tightening, as well to demonstrate our commitment towards restraint inflation, thus helping keep inflationary expectations in check.”

Evans stated that inflation is running above three times the Fed’s 2% target. Evans recommended that the Fed increase its policy rate to “expeditiously”, which should be within a range of around 2.25%-2.5%.

Fed policymakers are now doing this. The Fed chair Jerome Powell indicated that at least two additional rate increases were possible. Next month, the Fed will begin trimming its $9 trillion debt.

Evans, however, expressed a preference to move at a “measured pace”, a term that has in the past been used for quarter-point rate rises. This was slightly more conservative than Fed Chair Jerome Powell’s remarks earlier in the day.

Powell said to the Wall Street Journal that Powell will continue “pushing” for rate increases until inflation falls in a clear and convincing manner. If this does not occur, Powell stated that the central bank will move faster.

Evans stated that the Fed should slow down the rate of rate increases after an initial frontloading to allow time for supply chain kinks to ease and inflation dynamics to assess the effect of increased borrowing costs on a labor market described as “downright tight”.

The unemployment rate is 3.6%, and the number of job opportunities has reached a new record.

Evans explained that if we have to we are well-equipped to react more aggressively in the event of inflation conditions not improving sufficiently. Alternatively, we can scale back plans adjustments to protect our employment mandate if economic conditions become less favorable.

Inflation pressures being as strong as they are, the economist suggested that interest rates might need to go “somewhat” higher than neutral to reduce inflation.

Futures traders are betting that this will happen, as prices for futures contracts linked to the Fed’s policy rate reflect expectations of an end-of year policy rate range between 2.75% and 3%.

Evans doesn’t believe that the Fed will cause a recession. This is contrary to criticisms from former central bankers in the United States.

Evans explained that Evans believes that a slightly restrictive approach to economic growth will be acceptable given the strength of aggregate and worker demand as well the anticipated supply-side changes.