Fed’s Evans: Looking Forward to Time When Fed Can Raise Rates

Chicago Federal Reserve Bank President Charles Evans, one of the U.S. central bank’s most dovish policymakers, said on Tuesday that he looks forward to the time when the economy is strong enough to handle a Fed rate hike.

He also suggested the Fed needs to be careful not to raise rates if it will just have to lower them again shortly afterward, a theme he has hit time and again as he as argued against the rate hike that the Fed is currently considering.

The Fed has kept rates near zero for nearly seven years since the 2007-09 financial crisis.

“I think it’s extraordinarily costly to contemplate a high probability that we’re going to revisit the zero lower bound, after a period where we’ve gotten ourselves out of this, over the next 10 years,” he said.

Evans made the comments during a discussion of U.S. government debt at the University of Chicago’s Booth School of Business, where some experts proposed that more coordination between the Fed and fiscal authorities could result in a stronger economy, especially when interest rates are pinned near zero and the Fed has little flexibility on policy actions.

Reuters

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Craig Erlam

Craig Erlam

Senior Market Analyst - UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a Market Analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam