In a recent interview with CNBC, Chicago Federal Reserve President Charles Evans said, “I can see the funds rate being flat and unchanged into the fall of 2020. For me, that’s to help support the inflation outlook and make sure it’s sustainable.”
On "Squawk Box", Evans explained, “I had been thinking that inflation was finally going to be solid, hit 2 percent on a sustained basis — maybe go over a little bit. That was my projection,” as recently as September and December 2018, Evans thought there could be a few rate hikes in the near future. Recently, Evans and other Fed colleagues voted to hold the benchmark overnight lending rate in March, telling CNBC at the time, “I think anytime the economy decelerates from 3.1 percent down to 2 percent, it takes a really sharp-minded focus to kind of go, ‘All right, it’s less than what we had but it’s still pretty good.'"
The central bank’s preferred inflation metric, core personal consumption expenditures index, rose to 2 percent in May 2018, but has had trouble maintaining that level. Some Fed officials that have been concerned about spotty inflation reads — including Evans — have suggested that they’d be comfortable letting prices rise above a 2 percent pace in times of economic expansion to balance out periods of lower inflation and slower GDP growth.
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