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Comment: Chicago’s Evans isn’t ready for an insurance cut in rates in spite of concerns about low inflation

Chicago Fed President Charles Evans said in a CNBC interview that markets may be getting ahead of Fed policymakers.  Evans is generally considered one of the more dovish policymakers – at least when it comes to inflation. Although he feels some concerns about present lower inflation readings below the 2% objective, he views the overall economy as “solid” and the rates set by the FOMC as “appropriate”. That markets have priced in two interest rate cuts, he said that the “market sees something that I haven’t yet seen in the national data.”

Evans is a voter on the FOMC in 2019. It is notable that over the course of the financial crisis and recession and initial sluggish recovery, he was a strong advocate for the Fed doing everything it could to ensure the economy recovered. That he is not yet ready to support a so-called “insurance” cut in rates speaks to a consensus among policymakers that the economic fundamentals are sound — if not as robust in the past year or two – and that risks to the economy have not exerted a significant impact – for now.

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