CHICAGO (Reuters) – The Fed should cut interest rates by half a percentage point before the end of the year to boost persistently weak inflation and convince the public that policymakers are serious about their 2 percent inflation target, Chicago Federal Reserve president Charles Evans said on Friday.
“Inflation expectations seem to me to be anchored a little bit below a level consistent with our two percent objective, and it has been stubborn like that,” said Evans, currently a voting member of the Fed’s rate setting committee. “That tells me our current setting for policy is a little bit on the restrictive side…I need a couple of rate cuts…in order to get the inflation outlook up.”
Fed - Month - Cut - Quarter - Percentage
The Fed meets later this month and is widely expected to make a cut of at least a quarter of a percentage point.
Evans’ comments expand on what has become a broad set of reasons for the Fed to cut rates, each providing a different set of policymakers a rationale for lowering borrowing costs even with unemployment near a record low and, by most accounts, the economy growing at a healthy pace.
Testimony - Congress - Week - Fed - Chairman
In testimony before Congress this week, Fed chairman Jerome Powell focused on risk...
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