Fed’s Evans: Inflation too low, monetary policy should not change
President of the Federal Reserve Bank in Chicago Charles Evans expressed on Wednesday his opinion that the inflation in the United States is “far too low” and that the Fed has “a long way to go” until its goal of a 2% inflation is reached. “To help this process, it will be critical for monetary policymakers to look through temporary price increases and not even think about thinking about adjusting policy until the economic criteria we have laid out have been realized,” he added.
Evans also forecast that the bank will reach its maximum employment goal over the next three years. He also stated that the US economy will grow in the range of 5 to 6% this year, and 2 to 3% in 2022 and 2023. Inflation should end the year in the range of 1.5% to 1.75%. “With continued growth, further improvements in labor markets, and accommodative monetary policy, I see inflation moving up steadily and eventually running moderately above 2 percent for some time in the mid-2020s,” Evans explained.
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