By Ann Saphir

(Reuters) -Chicago Federal Reserve Bank President Charles Evans on Monday signaled he would not necessarily oppose getting interest rates up to a neutral setting of 2.25% to 2.5% by the end of the year, a pace that would require a couple of 50 basis-point rate hikes at upcoming Fed meetings.

“Fifty is obviously worthy of consideration; perhaps it’s highly likely even if you want to get to neutral by December,” Evans told the Detroit Economic Club.

But, he added, the Fed should not raise rates so fast that it doesn’t have enough time to assess inflation pressures and adjust policy in response.

“I think the optionality of not going too far too quickly is important,” he said. “I would focus the attention on where do we want to be at the end of the year.”

The Fed raised rates last month for the first time in three years, and with inflation accelerating is expected to ramp up its pace of rate hikes with half-percentage-point increases for a couple meetings instead of the usual quarter-point increments.

Evans, long on the dovish end of the Fed policymaker spectrum, said he had thought the Fed should get interest rates up to a 2.25% to 2.5% range over the next year, but on Monday said he doesn’t think that speeding that process up by three months will hurt the economy.

“I think there’s good momentum for the economy” and vibrant labor markets will continue as rates rise toward neutral, he said. But once rates get there, he said, the Fed needs to be “mindful” of the outlook for the economy and the state of inflation.

A government report on Tuesday is expected to show consumer prices rose 8.4% last month, far above the Fed’s 2% inflation goal. Fed policymakers like Evans say they expect pressures to recede this year as supply constraints ease and as higher borrowing costs squeeze demand.

By the end of this year, Evans said, the Fed will know a lot more.

“Is it going to be that some of these pricing pressures have crested, and they start coming down? Or are they going to stay high — or are they going to be higher?” Evans said. “And if it’s because of supply concerns, real resource pressures, there’s going to be a lot of gnashing-of-teeth angst over the inflation versus the concern for the economy. And I think finding the right balance is going to always be at a premium.”

(Reporting by Ann Saphir; Editing by Jonathan Oatis and Andrea Ricci)