There is no evidence that zero interest rates in the United States, in place since late 2008, is too-easy, said Charles Evans, the president of the Chicago Fed, on Monday. "There is no meaningful upward momentum in inflation," Evans said in a speech prepared for delivery to a conference in Stockholm, Sweden. And businesses continue to sit on "piles of cash," he said. "This is a sign that they think the real rate of return on prospective investment projects is quite low," said Evans, a voting member of the Fed policy committee this year. Inflation isn't likely to get above the Fed's 2% annual target rate until 2018, he said. "I see no compelling reason for us to be in a hurry to tighten financial conditions until" there is much greater confidence that inflation one or two years ahead will be at our 2% target, he added. Evans said that the case could even be made that the U.S. economy needed more accommodation at the moment. Evans is one of only two Fed officials who think the U.S. central bank should wait until 2016 to increase interest rates. He urged the majority who support a rate hike this year - 15 officials at the last count in March - not to be in a hurry. "Let's be confident that we will achieve both dual mandate goals within a reasonable period of time before taking actions that could undermine the very progress we seek," Evans said.
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