By Erica Snow 

Federal Reserve Bank of Chicago President Charles Evans suggested Wednesday the central bank needs to raise short-term interest rates further, but didn't say how much or for how long.

Mr. Evans told an audience at an event in Chicago the Fed should lift its benchmark federal-funds rate to a so-called neutral level that neither stimulates nor slows economic growth, but he didn't specify his estimate of neutral nor how many rate increases he thinks will be necessary to get there.

"I don't really know what neutral is," he told reporters after the event, adding that he and his colleagues will be watching how the economy performs as they assess how far to raise rates. "This is the art of dealing with the uncertainty," he said.

With U.S. unemployment at a low 3.7% and inflation at 2%, the economy no longer needs rates to be low enough to stimulate growth, he said at the event.

"So getting to a neutral setting is probably the first-order job," he said.

Fed officials voted in September to raise the fed-funds rate to a range between 2% and 2.25%, and they held rates steady at their meeting last week.

The officials' median projection in September of a neutral fed-funds rate was 3%, but their views ranged from 2.5% to 3.5%. They are due to release updated estimates at their December meeting.

In September, they penciled in one more rate increase this year, and their next policy meeting is scheduled for Dec. 18-19. Mr. Evans didn't say whether he would favor a rate increase next month.

He said he hasn't seen much evidence of a slowdown in global economic growth.

Mr. Evans cited Brexit and other factors as contributing to economic uncertainty. He said, however, he doesn't see such risks altering his expectation that the U.S. economy will grow 2.5% next year.

Despite President Trump's complaints about Fed rate increases, Mr. Evans said he would continue to monitor the economy to determine monetary policy.

(END) Dow Jones Newswires

November 16, 2018 16:18 ET (21:18 GMT)

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