Fed's Evans speaks in Illinois
Feds Evans speaks in Illinois. He says:
- expects the Fed funds to eventually rise to 3% – 3.25% range
- stocks decline puts valuation around long-run average
- downside risk increased by market turmoil, trade war
- sees inflation averaging just above 2% over the next 3 years
- inflation expectations of not risen as much is expected
- 1st half of 2019 is important for assessing Fed policy
- sees US growth bit more than 2% in 2019
- Fed has capacity to wait and take stock of incoming data
- sees unemployment falling toward 3.5%, a bit higher by end of 2021
- downside risks include growth abroad, US trade policy, fiscal headwinds
- there upside risks too. Case can be made for reasonably good 2019 the economic outcome
- crosscurrents are tough to read in fluid environment
- Hopefully, the economic data will be more like the strong December employment report and financial market volatility will settle down
The current fed funds rate is 2.00%-2.25%. The Fed projected two rate hikes in 2019 at the December meeting. That was down from three. The FOMC meeting minutes will be released a at 2 PM ET today.
