he Chicago Fed, wants the central bank to keep the federal funds rate near zero until unemployment falls to 6.5% — a jobless rate not seen since 2008.
Evans is not a voting member this year, but in January he will rotate into a voting role on the Fed’s policymaking committee. For about a year, he has been urging his colleagues to publish clear economic targets that would guide the central bank’s policies.
Known as the 7/3 rule, his initial suggestion would have kept interest rates near zero until the unemployment rate falls to 7% or inflation exceeds 3% a year.
Now, he’s changing that proposal, suggesting the central bank keep low interest rates in place even longer. He wants to see the unemployment rate fall to at least 6.5% and inflation not exceed 2.5% a year.
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