Chicago Fed Chief Says Rates Could Remain on Hold Until 2020

Chicago Federal Reserve President Charles Evans said on Monday that he’d be comfortable leaving interest rates alone until autumn 2020 to help ensure sustained inflation in the U.S.

“I can see the funds rate being flat and unchanged into the fall of 2020. For me, that’s to help support the inflation outlook and make sure it’s sustainable,” Evans told CNBC’s Steve Liesman.

Though Evans said he wouldn’t categorize the Fed’s December 2018 rate increase as a mistake, the central bank official did highlight more muted economic growth estimates and elusive inflation as priorities. The Fed has for years targeted 2% inflation as a level at which the U.S. economy can grow at a healthy clip.

The central bank’s preferred inflation metric, core personal consumption expenditures index, rose to 2% in May 2018, but has had trouble maintaining that level. Some Fed officials that have been concerned about spotty inflation reads — including Evans — have suggested that they’d be comfortable letting prices rise above a 2% pace in times of economic expansion to balance out periods of lower inflation and slower GDP growth.

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