US Fed Official Evans Says More Aggressive Fed Could Improved US Economic Performance

A top US Federal official said that the improving economic data should be viewed carefully and the US Federal Reserve should continue to provide significant policy support as the recovery moves forward.

Charles Evans, President of the Chicago Federal Reserve, said that the central bank should make the purchases if the labor market does not make enough progress rapidly enough.

Talking to media reporters before the meeting of Indiana Bankers Association in Carmel, Evans said that if Feds behave very aggressively, he thinks they could find improved economic performance one or two years faster than what they might eventually be seeing if they don’t take those actions and they want to make sure that they have enough space so that they can give it a chance.

Evans said that he is still concerned about economic risks, and his viewpoint for real US GDP growth remains largely unchanged from the November forecast, and his forecast for the country’s unemployment rate is only slightly lower. He also expects low inflation and said that when it comes to the US central bank’s monetary policy stance, the degree of accommodation should be substantial.

In 2008, the US Fed cut downs the interest rates to near zero and has since bought $2.3 trillion in long-term securities in an exceptional drive to urge growth and restore the economy after the worst recession in decades. The Fed’s purchases included mortgage-backed securities, which might have a more direct effect on the economy.

Evans said that he was worried the recent labor market progress could be temporary and that unemployment could even increase slightly in the next coming few months.

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Tags: Carmel, central bank, Charles Evans, Chicago Federal Reserve, economy, Federal Reserve, GDP, Indiana Bankers Association, interest rates, monetary policy, unemployment, US