Three Federal Reserve presidents are calling for patience as the central bank weighs when to raise interest rates above zero, arguing moving too soon poses a greater risk to the economy than waiting too long.
“We should be exceptionally patient in adjusting the stance of U.S. monetary policy —- even to the point of allowing a modest overshooting of our inflation target to appropriately balance the risks to our policy objectives,” Charles Evans, president of the Chicago Fed, said today in Washington.
Evans joined the New York Fed’s William C. Dudley and Narayana Kocherlakota of Minneapolis in warning the Fed shouldn’t make a change before being sure the economy can withstand higher borrowing costs. Both Dudley and Evans raised concerns about too-low inflation and made references to 1937, the year a tightening of monetary policy helped puncture a weak recovery from the Great Depression.
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