Fed's Evans: U.S. Inflation At 2.5% Better Than Hiking Too Quickly

MarketWatch Pulse

Charles Evans, president of the Chicago Federal Reserve, said on Wednesday he's so worried about weak consumer prices that he'd be okay with inflation cruising above the Fed's target of 2% to avoid suffering from a loss credibility like the Bank of Japan. The Japanese central bank abandoned its zero-rate policy in 2000 and hiked interest rates in a surprise move, which has since been criticized by many economists. "They've been suffering the consequences of that loss of credibility for a very long period of time," Evans said at the London event. "I'd rather see inflation go above 2% a little bit, maybe 2.5%, than having to worry about a situation like that." The Chicago Fed president repeated his stance that it's better for rates to stay low for longer, advocating for a rate hike in 2016 rather than 2015.

Copyright © 2015 MarketWatch, Inc.

Continue Reading Below