Chicago Fed President speaks in New York
- Concerned about downside misses on inflation
- Policy has been successful in achieving maximum employment, less so on inflation
- Fed must be willing to embrace inflation up modestly above 2% half the time
- He would communicate comfort with 2.5% core inflation if there is not upward momentum and path back to 2% can be managed
- Fundamentals for growth in US remain good
- Economy faces many uncertainties and risks about growth abroad, trade policy
- At the moment risks from downside scenarios loom larger than those from the upside
- Prudent approach to policy makes sense given heightened uncertainty
- Fed is currently reviewing maturity structure of balance sheet, better ways to achieve inflation target
- His economic forecast is consistent with median FOMC projections last month
- Inflation rise to 2.25% to 2.5% is not a big concern to me at the moment
- If activity softens more than expected or inflation too low, policy may be left on hold or loosened
- He is open-minded on right duration for feds asset portfolio
Evans is thought to be more of a dove. He is the president of the Chicago Fed and he is a voting member on the FOMC this year.
