The president of the Federal Reserve Bank of Chicago, Charles Evans, has cautioned that the US economy might not hit the Fed s target inflation rate until 2018 and to this end, he advises against raising interest rates until late 2016.
Evans is known in the banking and finance industry as a professional that advocates for accommodative policies, and having stated that the US economy is showing strong proofs of certain growth, advised that the Federal Reserve is in the best position to determine how and when to raise interest rates in the face of the weak economies being experienced by other countries and only if the US would keep its interest rates low at the moment.
Speaking at an event held within the Federal Reserve Bank of Chicago and hosted by the University of Chicago, Evans stated that We should be patient about maintaining the stance of our current policies; we should be in no hurry to raise interest rates.
According to the Chicago Fed president, instead of explicit numerical targets demanded by Fed policy, he d advice cutting down on rates especially as it relates to the target 2% inflation that should be achieved prior to hewing down on any accommodative policy.
According to Evans, We ought to provide an appropriate amount of accommodation to hit the inflation goal, and this is largely because the Fed has failed to raise rates to the point of achieving the stated 2% benchmark.
Mr. Evans is scheduled to fill a position on the Federal Open Market Committee a monetary-policy-setting group, this year, and in justifying his support for a gradual increase of rates over a period of time so as not to exert unnecessary deflationary pressures on a struggling economy that is aiming to hit the Fed s 2% target, added that the U.S. housing market hasn t shown as robust signs of growth as he would like, but a host of other indicators give him confidence that the economy could be well past the poor performance since the recession.