Federal Reserve Chicago president Charles Evans pointed out that the current level of interest rates, in his view, would not be appropriate should there be a future negative shock to the U.S. economy.The U.S. economy is in a good place but the path of inflation will be important in deciding the future path of interest rates, Chicago Federal Reserve President Charles Evans said on Wednesday.
The Federal Reserve voted 8-2 to cut interest rates by a quarter percentage point at its October meeting to a target range of between 1.50 per cent and 1.75 per cent but signalled it would only lower rates again if there is a material deterioration in the U.S. economic outlook.Evans did, however, point out that the current level of interest rates, in his view, would not be appropriate should there be a future negative shock to the U.S. economy.
Evans also made clear that he believes the central bank needs to do better explaining that its 2 per cent inflation objective is symmetric – meaning it is comfortable with deviations both above and below that level.