Fed's Evans speaks on monetary policy
- see substantial cost to premature rate liftoff
- want to see upper movement and inflation before liftoff
- fed must clearly explain how it will achieve its goals
- best approaches for later liftoff and gradual tightening
- does not see inflation headwinds easing until mid-2016
- slower China weaker energy could dampen inflation.
- There is no problem in moderately overshooting 2%
- his view somewhat more accommodative verse said median expectations.
- Appropriate to raise rates vary gradually.
- Extra patient approach to tightening is warranted
- Although labor conditions have improved significantly over the last 7 years, a number of other labor market indicators lead me to believe there is slack beyond what the unemployment rate alone indicates.
- A large number of people who are employed part time would prefer a full-time job
- The labor force participation rate is quite low, even after accounting for demographic and other long-running trends
- wage growth has been quite subdued
- Expects core PCE inflation to undershoot 2 percent by a greater margin over the next two years, and reach just below 2 percent only by the end of 2018
Evans is a voting member but is more of a dove. He is speaking in Milwaukee. The S& P is trading at 1891.17. The EURUSD is at 1.1240 after moving back to 1.1231. The 200 hour MA is at 1.1236. The 38.2% of the September move lower comes in at 1.1240. The USDJPY went from 119.84 to 119.72 but is back to 119.80.
The full text of the speech can be found https://chicagofed.org/publications/speeches/2015/marquette-thoughts-on-leadership-and-monetary-policy