Chicago’s FED president speaks on the economy, monetary policy and global growth:
- Expects U.S GDP growth of 2%-2.5% for the rest of 2016
- Dollar could weigh more heavily on domestic spending
- Sees Core PCE approaching 2% within 3 years
- Sees downside risks to his outlook for growth, inflation
- Two qtr point FED rate hikes may be appropriate in 2016
- Conditions may tighten if FED signals faster hiking pace
- Risk management favors keeping FED policy easier
- Can make case for delaying hike until core inflation 2%
- Risks include deterioration in international situation
Charles Evans says h’s of two minds at the moment which makes the FED’s policy uncertain. He sees two hikes this year, but on the other hand he suggests that the FED may stay pat for the rest of the year. Nevertheless, his speech is rather dovish, in line with his well known view. He doesn’t give a clue on whether he will vote for a hike in June, so the market shows no reaction.
Any person acting on this information does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.