Fed’s Evans says he doesn’t fear 2.5% inflation, or even above

September 23, 2020

(Reuters) – The Federal Reserve will keep interest rates at zero until the economy reaches full employment, inflation is “sustainably” at 2% and the Fed is confident it will overshoot that goal, Chicago Federal Reserve President Charles Evans said Wednesday.

“I do not fear stronger accommodation in the pursuit of clearly overshooting 2%, even to the point of 2 1/2, or even a little bit more,” Evans said at a virtual event hosted by MNI, adding that Fed forecasts suggest no rate hikes through at least 2023. Inflation of 2.5% for some time, he said, “is in the cards,” adding that while the Fed does not need to buy more bonds now, it wil do so if easier policy becomes needed.

(Reporting by Ann Saphir; Editing by Chizu Nomiyama)