Chicago Federal Reserve President Charles Evans said on Thursday that three rate hikes in 2022 would be a good "opening bid", though it could be four if inflation doesn't improve fast enough. Evans added that he is reluctant to declare that the US has reached full employment, but that inflation is "much too high" and controlling price pressures is now the best way of assuring the economic recovery. 

Evans went on to remark that the Fed's balance sheet is "very large" and the bank will likely start shrinking it "sooner than later" following rate increases. Evans said that he sees inflation dropping back under 2.5% by the end of 2022, with most of that adjustment a result of real not monetary factors. Officials should think seriously about raising interest rates at the Fed's March meeting, he added, adding that the Fed is still grappling with how fast policy should reach the neutral rate of interest.