Fed's Evans: Yield curve less of a concern than a couple months ago
Evans speaks with reporters
- If inflation rises faster than expected, it's a sign of a stronger economy that can withstand more hikes
- Says he will be reviewing his estimate of the neutral rate
- Change in fiscal environment could give rise to higher neutral rate
- Expect higher deficits to lead to steeper yield curve
- 2.5% inflation not a problem for Fed goals but won't provide accommodation if inflation heading to 3%
We hear so often from Evans that he's rarely a market mover but he's a good guy to listen to and get a sense of what the Fed's thinking about. I'm not so sure that hoping deficits will steepen the yield curve is a very good strategy.