Downside risks to inflation continue to cloud the outlook for interest rates despite an otherwise healthy U.S. economy, Federal Reserve Bank of Chicago President Charles Evans said.
“The one lingering difficulty, I would say, and it’s an important one, is that inflation pressures are still under-running our 2 percent objective in the U.S.,” Evans said Friday during a moderated discussion at an event in Dublin. “At the moment, I think the downside risks still predominate.”
Evans, who in recent years has been one of the central bank’s biggest advocates for maintaining accommodative policy, told reporters following the event that he could be fine with two more rate increases this year, putting him in line with most of his colleagues.
But he added that given the downside risks to inflation, it may be more appropriate to raise rates just once more if the outlook deteriorates. Evans has a vote on the rate-setting