Fed's Evans says 'reasonable' to raise rates to 3.25 percent

FILE PHOTO - Chicago Federal Reserve Bank President Charles Evans visits the online music retailer Sweetwater, in Fort Wayne, Indiana, U.S. September 14 2018. REUTERS/Ann Saphir

(Reuters) - Chicago Federal Reserve Bank President Charles Evans on Friday said raising interest rates to about 3.25 percent - about half a percentage point higher than his estimate of neutral - “would be a reasonable assumption,” given his outlook for the U.S. economy.

Speaking with reporters after a talk in Chicago, Evans said he will be looking at data on inflation, wages and the labor market more broadly to see how much farther rates need to rise, and added that for him, an increase in inflation to 2.5 percent would not be a problem as long as it looked likely to be temporary.

Evans said he sees some risks to the economic outlook, including from a possible global slowdown, but that it does not currently appear to be enough to disrupt the strong economic trajectory.

Reporting by Ann Saphir; Editing by Chizu Nomiyama and Dan Grebler