Federal Reserve Bank of Chicago President Charles Evans said Wednesday the U.S. might not hit the Fed’s target inflation rate until 2018 and he doesn’t advocate raising interest rates until 2016.
Evans, long-known as a proponent of accommodative policies, said the economy is currently exhibiting strong signs of growth, but low interest rates in the U.S. and weak economic performance elsewhere in the world should give the Federal Reserve pause as it determines when, and by how much, to raise interest rates.
“We should be patient about maintaining the stance of our current policies,” said Evans at an event sponsored by the University of Chicago and held at the Federal Reserve Bank of Chicago. “We should be in no hurry to raise interest rates.”
The Chicago Fed President said he would advocate hewing to “explicit” numerical targets for Fed policy, specifically, ensuring that a target 2% inflation is hit before reining in accommodative policy.
The Fed has shown a lack of success thus far by not being able to goad rates up to that 2% mark, he said. “We ought to provide an appropriate amount of accommodation to hit the inflation goal,” he said.