The Federal Reserve should launch a fresh round of monetary stimulus immediately, buying bonds for as long as it takes to produce a steady decline in the jobless rate, a top Fed official said on Monday.
Without a change in policy, the unemployment rate, now at 8.3 percent, was unlikely to fall below 7 percent before 2015 at the earliest, Chicago Federal Reserve Bank President Charles Evans told reporters in Hong Kong.
“I don’t think we should be in a mode where we are waiting to see what the next few data releases bring,” Evans told a seminar at the Hong Kong Bankers Club. “We are well past the threshold for additional action; we should take that action now.”
The U.S. central bank on August 1 kept U.S. monetary policy on hold, leaving interest rates at zero and reiterating the view that economic conditions will warrant keeping them there until at least late 2014.
Many policymakers thought more stimulus would be needed “fairly soon,” the minutes of the meeting show, but wanted to watch the data for signs of improvement that would render moot the need for additional easing.
Evans, who will have a vote next year on the Fed’s policy-setting panel, wants no part of that wait-and-see approach.
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