Comments from Chicago Fed President Charles Evans
- Has 'serious concerns' about excessively low inflation
- Sees inflation below 2% until end 2018
- Fed should only raise rates when confident inflation is heading higher
- Sees US GDP growth at 3% for next couple of years
- Full employment is 5%, sees labor market slack
- Costs of tightening monetary policy too late are low
- Rising rates too early could undermine recovery
Evans
is an arch-dove so the comments aren't a big surprise but he seems to
be stepping up his anti-hiking rhetoric so that could spook USD bulls.
Evans makes a good point about the risks for inflation. I just can't envision a scenario where high inflation becomes a problem because the Fed could just keep hiking rates. Disinflation, on the other hand, is a tough problem to solve and you can make it worse with rate hikes.
That said, I don't think Evans holds much sway and patience is going to come out of the statement in two weeks.
