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As inflation misses goal, Fed's Evans calls for gradual rate hikes

Reuters  |  NEW YORK 

NEW YORK (Reuters) - With stubbornly soft despite a 16-year low in the U.S. unemployment rate, the Federal Reserve should move only slowly to raise and trim its massive bond portfolio, President Charles said Monday.

"I don't want to get hung up over small differences" between whether the raises rates two, three or four times over the course of 2017, said in remarks prepared for delivery to Money Marketeers of New York University. "The important feature is that the current environment supports very gradual rate hikes and slow preset reductions in our balance sheet."

Repeating much of a similar talk he gave in May, said that while the had essentially achieved its goal of full employment, it has had a "serious policy outcome miss" on its other goal of 2-percent

Unemployment fell to 4.3 percent in May, below what many officials say is sustainable in the long run. But inflation, which by the Fed's preferred gauge fell to 1.5 percent in April, has run below the Fed's 2-percent target for years.

Despite his warning on too-low inflation, last week cast his vote with the 8-1 majority at the who supported lifting the target range for short-term by a quarter of a percentage point. hikes are typically aimed at slowing growth and

officials also reaffirmed their expectation of one more in 2017, bringing the total for the year to three, and said they expect to begin allowing the $4.5 trillion balance sheet to shrink by an initial $10 billion a month. On the margin, a smaller balance sheet delivers less downward pressure on longer-run borrowing costs.

"It remains to be seen whether there will be two rate hikes this year, or three, or four-or exactly when we start paring back reinvestments of maturing assets," said. "Ultimately, our exact actions will appropriately be driven by how events transpire to influence the outlook for achieving our policy goals."

(Reporting by Richard Leong; Writing by Ann Saphir; Editing by Diane Craft)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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As inflation misses goal, Fed's Evans calls for gradual rate hikes

NEW YORK (Reuters) - With inflation stubbornly soft despite a 16-year low in the U.S. unemployment rate, the Federal Reserve should move only slowly to raise interest rates and trim its massive bond portfolio, Chicago Fed President Charles Evans said Monday.

NEW YORK (Reuters) - With stubbornly soft despite a 16-year low in the U.S. unemployment rate, the Federal Reserve should move only slowly to raise and trim its massive bond portfolio, President Charles said Monday.

"I don't want to get hung up over small differences" between whether the raises rates two, three or four times over the course of 2017, said in remarks prepared for delivery to Money Marketeers of New York University. "The important feature is that the current environment supports very gradual rate hikes and slow preset reductions in our balance sheet."

Repeating much of a similar talk he gave in May, said that while the had essentially achieved its goal of full employment, it has had a "serious policy outcome miss" on its other goal of 2-percent

Unemployment fell to 4.3 percent in May, below what many officials say is sustainable in the long run. But inflation, which by the Fed's preferred gauge fell to 1.5 percent in April, has run below the Fed's 2-percent target for years.

Despite his warning on too-low inflation, last week cast his vote with the 8-1 majority at the who supported lifting the target range for short-term by a quarter of a percentage point. hikes are typically aimed at slowing growth and

officials also reaffirmed their expectation of one more in 2017, bringing the total for the year to three, and said they expect to begin allowing the $4.5 trillion balance sheet to shrink by an initial $10 billion a month. On the margin, a smaller balance sheet delivers less downward pressure on longer-run borrowing costs.

"It remains to be seen whether there will be two rate hikes this year, or three, or four-or exactly when we start paring back reinvestments of maturing assets," said. "Ultimately, our exact actions will appropriately be driven by how events transpire to influence the outlook for achieving our policy goals."

(Reporting by Richard Leong; Writing by Ann Saphir; Editing by Diane Craft)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
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As inflation misses goal, Fed's Evans calls for gradual rate hikes

NEW YORK (Reuters) - With stubbornly soft despite a 16-year low in the U.S. unemployment rate, the Federal Reserve should move only slowly to raise and trim its massive bond portfolio, President Charles said Monday.

"I don't want to get hung up over small differences" between whether the raises rates two, three or four times over the course of 2017, said in remarks prepared for delivery to Money Marketeers of New York University. "The important feature is that the current environment supports very gradual rate hikes and slow preset reductions in our balance sheet."

Repeating much of a similar talk he gave in May, said that while the had essentially achieved its goal of full employment, it has had a "serious policy outcome miss" on its other goal of 2-percent

Unemployment fell to 4.3 percent in May, below what many officials say is sustainable in the long run. But inflation, which by the Fed's preferred gauge fell to 1.5 percent in April, has run below the Fed's 2-percent target for years.

Despite his warning on too-low inflation, last week cast his vote with the 8-1 majority at the who supported lifting the target range for short-term by a quarter of a percentage point. hikes are typically aimed at slowing growth and

officials also reaffirmed their expectation of one more in 2017, bringing the total for the year to three, and said they expect to begin allowing the $4.5 trillion balance sheet to shrink by an initial $10 billion a month. On the margin, a smaller balance sheet delivers less downward pressure on longer-run borrowing costs.

"It remains to be seen whether there will be two rate hikes this year, or three, or four-or exactly when we start paring back reinvestments of maturing assets," said. "Ultimately, our exact actions will appropriately be driven by how events transpire to influence the outlook for achieving our policy goals."

(Reporting by Richard Leong; Writing by Ann Saphir; Editing by Diane Craft)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22