Evans argues the Fed shouldn’t prematurely reduce accommodation due to high unemployment and low inflation. It’s no surprise to hear dovish comments from Evans.
- Sees inflation closer to 1.5% by end of 2015
- Sees unemployment at or below 6% by the end of 2015
- Too-low inflation ‘puzzling and worrisome’
- ‘We are in no hurry to raise rates’
- Forecasts 2.75% GDP growth in 2014
- ‘Nothing even smoldering’ on inflation
- Decision to scale back bond buys was aimed at rebalancing policy mix, not reducing accommodation
That last comment is especially dovish if it speaks for the Fed. The FOMC has hinted that it’s unhappy with QE and the increasing risks of the enormous balance sheet and may have wanted to shift to forward guidance instead.
