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Fed Evans sees inflation drop under the central financial institution's 2% goal after the present rise subsides

The current wave of inflation will not continue and will ultimately fall under the Federal Reserve's target, Chicago Fed President Charles Evans said Tuesday.

While inflation is at 30-year highs on some measures, Evans told CNBC that supply chain bottlenecks and other issues will ease and price pressures will ease.

"I can well imagine that these are increased prices, that they will go down when supply bottlenecks are resolved," he told CNBC's Steve Liesman during a live interview with Squawk Box. "I think it could take longer than we expected, absolutely, there is no doubt about that. But I think it is unlikely that these prices will continue to rise."

Inflation has been 3.6% year-on-year in recent months, its highest level since the early 1990s, according to the Fed's preferred benchmark. Other measures, such as the consumer price index, are making inflation even hotter.

Evans admitted that the trend is putting the economy under pressure.

“This is definitely a challenge for households and companies. I mean, it reduces incomes and wages. So that's a problem. We are definitely monitoring this, ”he said. “It's really not a monetary policy issue, it's a question of infrastructure at the moment. So I think inflation is going to go down, and I think once it goes down we will still be in a low interest rate … world. "

Still, the Fed has broadly signaled that it has fulfilled the inflationary part of its mandate and that the level is well above the 2% target. As a result, the central bank is expected to slowly withdraw the unprecedented support it has given during the pandemic, starting with a reduction in monthly security purchases.

However, according to the current forecasts of the Federal Open Market Committee, interest rate hikes are not expected until the end of 2022 at the earliest. According to the CME's FedWatch tool, the first price hike will be in either November or December next year.

While Evans said he was on board with the throttling, he said the Fed will soon face the familiar change of keeping inflation healthy and likely to need to keep interest rates low.

"Getting monetary policy to create sustained inflation at and above 2% so that we can average 2% over time is just a challenge," he said.

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