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Fed's Evans: 'Let's be patient' on U.S. inflation

Economy Sep 30, 2021 05:06PM ET
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© Reuters. FILE PHOTO: Chicago Federal Reserve Bank President Charles Evans looks on during the Global Interdependence Center Members Delegation Event in Mexico City, Mexico, February 27, 2020. REUTERS/Edgard Garrido

By Ann Saphir

(Reuters) -Chicago Federal Reserve Bank President Charles Evans on Thursday said he believes that the supply shocks that are pushing up on prices now will ease next year, and low interest rates will still be needed to bring U.S. inflation back durably to 2%.

"Let's be patient and not declare victory on inflation," Evans said in an online webinar with Princeton University's Bendheim Center for Finance.

Inflation, he said, will likely fall back to around 2.1% next year and could rise to 2.4% in 2023 as the Fed begins what he anticipates will be a very gradual pace of interest rate increases.

If inflation does rise above that level, he said, he would want to tighten policy more quickly, but that's not his expectation.

His read on a wide range of measures of inflation expectations does not suggest recent high inflation readings are getting entrenched into the long-term trajectory for U.S. prices.

Inflation expectations "are not getting out of hand," Evans said, adding that his worry continues to be whether even now they are high enough to be consistent with the Fed's 2% target. "We've underrun our 2% inflation expectation almost since we announced it in 2012."

Fed's Evans: 'Let's be patient' on U.S. inflation
 

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Comments (2)
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Sep 30, 2021 11:43PM ET
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Constipated Dr. Jerome Bubble is just beginning to deliver big lumpy chunky droppings in stocks. You have to be patient for gold to go up. Dr. Jerome Bubble is contemplating heavier vaccine against constipation. Then the reopen of chunky lumpy droppings will start
peter neal
peter neal Sep 30, 2021 6:05PM ET
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They are active investor and are biased. They should be forced to hold all assets in money market fund while in office. They are also liars and scammers. Inflation is 8 percent.
Larry Langley
Larry Langley Sep 30, 2021 6:05PM ET
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notice the frequency of each ones public interviews or announcements? They know when they do it affects the market. I blame the craziness of the past 8 months on them.
 
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