Fed's Evans Says More Accommodation Needed to Reach 2% Inflation

(Bloomberg) -- Federal Reserve Bank of Chicago President Charles Evans says the economy may require more monetary accommodation to get inflation back up to the central bank’s 2% objective.

• “A couple” of rate cuts could raise inflation trajectory and lift the the personal consumption expenditure price index to 2.2% in 2021, Evans says at event in Chicago
• Fed should be aiming for a bit above 2% inflation at this point, 2.5% would be completely consistent with central bank’s objective
• Says still increasing job growth in a way that unemployment could fall
• The labor market “seems quite vibrant,” unemployment rate is very low relative to history, many more people have come into the labor force recently than had been expected
• Looking for 2% growth this year, 2% is pretty close to trend growth, so is sustainable: Evans
• The consumer “has been very strong,” business investment has been a little weaker over the last year than he might have expected given fiscal stimulus
• NOTE: Evans votes on policy-setting FOMC this year
• NOTE: U.S. Core Consumer Inflation Tops Projections in Broad Gain (2)
• NOTE: U.S. Producer Prices Increased More Than Forecast in June (1)

To contact the reporter on this story: Matthew Boesler in Chicago at mboesler1@bloomberg.net

To contact the editors responsible for this story: Alister Bull at abull7@bloomberg.net, Jeff Kearns

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