HONG KONG (Reuters) – With downside risks looming and uncertainties rife, the U.S. Federal Reserve is prudent to wait for more economic data before deciding whether its next move will be to raise rates, or cut them, Chicago Fed Bank President Charles Evans said on Monday.
“If growth runs close to its potential and inflation builds momentum, then some further rate increases may be appropriate over time to ensure that the economy settles in on its long-run sustainable growth path and that inflation runs symmetrically about our 2 percent target,” Evans said in remarks prepared for delivery in Hong Kong.
Contrast - Activity - Inflation - Inflation - Expectations
“In contrast, if activity softens more than expected or if inflation and inflation expectations run too low, then policy may have to be left on hold – or perhaps even loosened – to provide the appropriate accommodation to obtain our objectives.”
Last week the U.S. central bank left rates steady in a range of 2.25 percent to 2.5 percent. Fresh forecasts showed 11 of 17 Fed policymakers expected no rate change for the rest of the year, up from just two in December. That unexpectedly dovish signal had financial markets quickly pricing in a rate cut next year.
Fed - Chairman - Jerome - Powell - Inflation
Fed Chairman Jerome Powell cited low inflation, a slowing global economy and risks like U.S. trade tensions...
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