NEW YORK (MaceNews) – The economy is “in a good place” and the Federal Reserve’s monetary policy is now accommodative enough, Chicago Fed President Charles Evans said Wednesday.
Uncertainties facing the economy prompted policy-makers to make policy adjustments to “lean toward an accommodative stance,” Evans said during a moderated discussion at the Council on Foreign Relations. “After three rate cuts, it’s definitely accommodative,” he said.
Later, during an interview with reporters, Evans said recent economic data, including the US jobs report, show “the economy is in a good place .… We made a nice (policy) adjustment from a risk management perspective …. I feel comfortable with where we are.”
Evans said he expects a smooth deceleration in growth to trend, while inflation slightly overshoots the Fed’s 2% target based on his assumption that policy is accommodative.
Asked whether weakness in manufacturing was hitting the rest of the economy, Evans responded, “At the moment it looks like the slowdown in manufacturing is not affecting the consumer on a broad level” as the labor market remains strong, he said.
“With 75 basis points in accommodation, things could play out nicely,” he said.
Earlier, during the moderated discussion, Evans said Fed policy-makers need to do a better job spelling out what the symmetrical inflation target means, and “we should be willing to spend time above 2%,” even if “part of the DNA of central bankers is to get twitchy when it gets above 2.”
Asked about the impact of recent tax cuts on business investment, Evans said the “consumer is supporting the economy in an enormous way in a way that the business community is not.”