Fed's Evans Keeps Door Open on Possible Third Rate Cut This Year
October 16 2019 - 10:14AM
Dow Jones News
By Michael S. Derby
Chicago Fed leader Charles Evans kept the door open to an
October rate cut in remarks Wednesday, but didn't indicate he was
willing to walk through it yet.
The veteran central banker and member of the rate-setting
Federal Open Market Committee said his outlook was in line with the
central bank's official forecasts that held for no further change
in rates this year. "I think policy probably is in a good place
right now...the growth outlook is good, and we have policy
accommodation in place to support rising inflation," he said.
But the official noted that he hasn't yet fully made up his mind
in a time of greater uncertainty about the outlook. Mr. Evans'
comments came from the text of speech to be presented in Peoria,
Ill.
"There is some risk that the economy will have more difficulty
navigating all the uncertainties out there or that unexpected
downside shocks might hit," Mr. Evans said. "There is an argument
for more accommodation now to provide some further risk management
buffer against these potential events," Mr. Evans said.
As the Fed moves toward its Oct. 29-30 Federal Open Market
Committee gathering, Mr. Evans said "I am keeping an open mind to
these arguments, " which may or may not support another rate
cut.
The Fed lowered its overnight target-rate range by a
quarter-percentage point at both its July and September policy
meetings. It is broadly expected to do it again in October, but Fed
officials have refrained, by and large, from giving clear guidance
about what they'd like to see. Mr. Evans has voted in favor of the
rate cuts done so far this year.
In his remarks, Mr. Evans says he expects growth to hew toward
its longer-run trend and come in just over 2%, "as continued
strength in consumer spending offsets weakness in business outlays
and net exports."
"I anticipate the unemployment rate to remain close to its
current low level for some time -- and thus below that long-run
benchmark of 4.2%," Mr. Evans said. He also said he looks for
inflation "to move up slowly and then modestly overshoot our 2%
target a couple years down the road."
(END) Dow Jones Newswires
October 16, 2019 10:59 ET (14:59 GMT)
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