Evans: Fed should take “extra-patient approach” to raise rates

By FXStreet FXStreet (Córdoba) – Chicago Federal Reserve Bank President, Charles L. Evans said today that he needs more confidence that inflation is heading toward the central bank’s target before calling for the first rate hike since 2006. Evans is currently a voter at the FOMC.

Key Quotes:

“Before raising rates, I would like to have more confidence than I do today that inflation is indeed beginning to head higher. Given the current low level of core inflation, some evidence of true upward momentum in actual inflation is critical to this assessment.”

“I believe that it could well be the middle of next year before the headwinds from lower energy prices and the stronger dollar dissipate enough so that we begin to see some sustained upward movement in core inflation. After liftoff, I think it would be appropriate to raise the target interest rate very gradually. This would give us sufficient time to assess how the economy is adjusting to higher rates and the progress we are making toward our policy goals.”

“Overall, my view of appropriate policy is somewhat more accommodative than what is represented by the median of the FOMC’s well-known “dot plot.”

“However, I am far less confident about reaching our inflation …read more

Source:: FX Street