Daily Mirror (Sri Lanka)

Fed’s Evans says he’s optimistic on inflation, wants rate hikes

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Chicago Federal Reserve Bank President Charles Evans, one of the Fed’s most dovish policymake­rs, said Saturday that he is optimistic inflation will reach the Fed’s 2 percent goal and that slow, gradual rate increases will be appropriat­e.

“Fiscal policy has been much more supportive of further growth and so the need for accommodat­ive monetary policy is less than it was before,” Evans told reporters in comments after a talk at the University of Chicago Graduate China Forum.

The Fed next meets to set policy in June. If it remains on track for 2 percent, and inflation expectatio­ns rise, “continuing our slow, gradual increases will be appropriat­e to get us to the point where monetary policy isn’t really providing more lift to the economy.”

Evans comments on Saturday are notable because they suggest that one of the Fed’s most outspoken ratehike skeptics backs further hikes even as worries about a potential trade war roil global equities markets.

China warned on Friday it was fully prepared to respond with a “fierce counter strike” of fresh measures if the United States follows through on President Donald Trump’s threat to slap tariffs on an additional US $ 100 billion of Chinese goods.

Asked about the effect of the trade conflict on his ratehike view, Evans suggested that while he is mindful of the potential impact and sees stable and predictabl­e trade policy as supportive for business, it is too soon to see anything in the data.

“Even the fiscal policy effects are mostly in the future,” he said.

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