Chicago Federal Reserve President Charles Evans said he did not think December’s rate rise was a mistake and he would be comfortable leaving rates unchanged until the autumn of 2020.

Mr Evans said in an interview with CNBC that economic data have strengthened in recent weeks, and noted “the first quarter is looking a little bit stronger than I might have thought at the end of December, early January.”

The “economy is doing solidly,” he said.

Mr Evans said he is not concerned about a downturn but does think inflation is “a little weaker than I would like to see”.

“What is a little concerning to me is inflation has been underrunning 2 per cent, and I had been thinking inflation was finally going to be solid, hit 2 per cent in a sustained basis, maybe go over a little bit. That was my projection and on the strength of that I had as recently as September and December thought that maybe a couple of rate hikes were in our future.”

Charles Evans

“I can see the funds rate being flat or unchanged into the fall of 2020. For me that’s to help support the inflation outlook and make sure that its sustainable at 2 or a little above,” he added.

His remarks come after the Federal Reserve in March completed its U-turn and ditched its plans for two interest rate rises in 2019. Indeed, the minutes of that meeting showed some officials stressing their policy outlook could “shift in either direction” as they seek to determine whether a weak bout of growth will persist.

READ  Costco bests Amazon as most satisfying company for Internet retail, survey finds

Mr Evans, who is due speak about current economic conditions and monetary policy in New York later on Monday, is a voting member of the Federal Open Market Committee.



READ SOURCE

WHAT YOUR THOUGHTS

Please enter your comment!
Please enter your name here