Chicago Fed president Evans is speaking in Iowa this afternoon and has some tidbits for both hawks and doves alike
For the hawks:
- Some data has surprised to the upside, could exceed expectations
- Leaving highly accommodative policy in place too long would eventually fuel inflationary pressure
- Monetary policy must not be passive if it is to achieve a benign inflation outcome
- Fed alert for incipient signs of inflation
For the doves:
- Tight credit will restrain recovery
- Headwinds will abate during 2010 but unemployment will decline only modestly
- Inflation relatively stable but uncertainty exists
- Increase in bank reserves not inflationary as most sitting idle
Expect the Beige book to be similarly structured a bit later this afternoon.
