US Fed’s Evens Says No Rate Hikes Until 2016

The Federal Reserve should wait until the first half of 2016 before raising interest rates, a top U.S. central banker said on Wednesday, or risk undermining the very recovery it has helped engineer.

“Given uncomfortably low inflation and an uncertain global environment, there are few benefits and significant risks to increasing interest rates prematurely,” Chicago Federal Reserve Bank President Charles Evans said in remarks prepared for delivery to the Lake Forest-Lake Bluff Rotary Club. “I think we should be patient in raising interest rates.”

Even if the Fed keeps rates at their near-zero level until next year, he said, inflation probably won’t reach the Fed’s 2-percent goal until the end of 2018. And if his forecast proves wrong and the economy begins to run too hot too fast, he said, the Fed would have “ample time” to raise rates moderately to head off excessively high inflation.

via CNBC

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