Charles Evans, president of the U.S. Federal Reserve Bank of Chicago, listens during a panel discussion at the American Economic Association (AEA) annual conference in Chicago, Illinois, U.S (Photographer: Daniel Acker/Bloomberg)

Evans Says Fed Can Easily Be Patient and Assess Economic Outlook

(Bloomberg) -- The U.S. central bank can “easily” take a patient stance toward additional interest-rate increases as it assesses the outlook for the economy amid turmoil in financial markets and muted inflation, Federal Reserve Bank of Chicago President Charles Evans said.

“We’re just at a good point for sort of pausing,” Evans said Thursday in a Bloomberg Television interview. “I’m not worried about inflation getting out of hand.”

Evans, who votes this year on the bank’s rate-setting Federal Open Market Committee, echoed Fed Chairman Jerome Powell and other policy makers who have signaled in recent weeks that they will probably press pause on their campaign of steady rate increases.

Fed officials in December raised the target range for their benchmark overnight rate by a quarter percentage point -- marking the ninth hike in about three years -- and projected it would be appropriate to authorize two more increases in 2019, according to the median FOMC participant’s estimate. The announcement contributed to market volatility, and central bankers have since stressed flexibility toward the prospect of additional tightening.

Europe, China

Evans said sources of economic uncertainty include slower growth in Europe and China, as well as possible effects of the trade war with Beijing and the U.S. government shutdown.

Evans Says Fed Can Easily Be Patient and Assess Economic Outlook

“The longer it goes on, I think it becomes a little bit more of a challenge, and the uncertainties mean that people are going to delay making certain types of investments, and that’s not good for the outlook either,” Evans said of the partial shutdown.

Still, the Chicago Fed chief projected overall confidence in the economy, pointing to a strong consumer and last month’s job gains that exceeded analyst estimates.

“I wouldn’t be surprised if at the end of the year we have a funds rate that’s a little bit higher than where we are now,” he said. “That would be associated with a better economy and inflation moving up.”

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