Chicago Fed’s Evans says there’s more uncertainty around inflation than a few months ago

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Chicago Fed's Evans says there's more uncertainty around inflation than a few months ago
Chicago Feds Evans says theres more uncertainty around inflation than


One of the more dovish Federal Reserve officials admitted Wednesday that inflation has persisted for longer than he expected. “Now, I will admit that this has gone on longer than I expected,” Chicago Fed President Charles Evans said in a moderated discussion with the Mid-Size Bank Coalition of America. “I expected that the supply chain was going to be more resilient than what we have seen.”

By the middle of next year, the Fed will learn whether the supply chain is working and prices are going to revert. “There’s more uncertainty that I expected a couple of months ago,” said Evans. Evans said the economy had good momentum, though it was derailed a bit by the spreading of the Delta variant of coronavirus in the third quarter. He said a sudden stop to the Fed’s bond buying would not be well received, as he repeated the stance that it will take until the middle of next year for the central bank to complete its bond purchase taper, and then start thinking about when the right time will be to raise interest rates. He said he’s not “quite as nervous as house prices” now as the Fed should have been heading into the subprime crisis. “I’m more confident that we don’t have the same type of leverage in underlying mortgage products,” he said.



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