By Suzanne Cosgrove
CHICAGO (MaceNews) – Chicago Federal Reserve Bank President Charles Evans Wednesday repeated the economy is “in a good place” after recent rate cuts, but he is “keeping an open mind” headed into the Federal Open Market Committee meeting later this month.
In remarks prepared for delivery to the Greater Peoria Economic Development Council, Evans said “the (U.S.) growth outlook is good, and we have policy accommodation in place to support rising inflation. “
However, he added, “there is some risk that the economy will have more difficulty navigating all the uncertainties out there or that unexpected downside shocks might hit. So there is an argument for more accommodation now to provide some further risk-management buffer against these potential events.” Evans cited difficult trade negotiations, slowing foreign growth, and uncertainty weighing on domestic demand as challenges to the economy.
“These are the types of problems that monetary policy is able to address to some degree, as more accommodative financial conditions can provide an offsetting boost to weakening aggregate demand,” he said. Another concern is ensuring inflation returns to the Fed’s target goal of 2 percent, Evans said.“I am keeping an open mind to these arguments, which I’m sure we will discuss fully at our (Federal Open Market Committee) meeting later this month,” Evans told the group. “Of course, we obviously would act aggressively if actually faced with an imminent downturn.“
Evans stressed the importance of risk-management considerations in the formulation of Fed monetary policy, stating that while our “goals remain constant, our policy tactics must evolve to keep pace with economic developments.”