Fed’s Evans Says Later Rate Hike Better for US Economy

A later liftoff from near-zero interest rates will better help the U.S. economy navigate through uncertain economic trends, a top Federal Reserve official said Monday.

In prepared remarks at Marquette University, Chicago Federal Reserve President Charles Evans contended normalizing policy too early brings risks amid pressure on inflation from low energy prices and “subdued” wage growth. The Fed would need to normalize gradually after the first hike to avoid shaking markets further, he said.
The Fed’s policy-making committee held off on raising its short-term interest rate target at its September meeting amid rocky stock markets and concerns about a global slowdown. Evans is a voting member on the committee.

On Monday, Evans contended that inflation headwinds from energy prices and a stronger U.S. dollar will likely not subside until the middle of next year. He noted that he was “fairly confident” the U.S. economy will reach the central bank’s goals for employment within a “reasonable period,” but was much less certain about inflation moving toward its 2 percent target quickly.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza