Speaking at a conference in Istanbul, Evans, one
of the Fed's most ardent doves, said inflation needed to get
much closer to the U.S. central bank's 2 percent target before a
rate hike could be contemplated.
"Everybody is more comfortable and understanding the current
economic conditions are such that (it is) appropriate for
monetary policy to remain highly accommodative well into 2015
and you know it could even be 2016," he said.
Fed officials have been worried that inflation is running well
below 2 percent. But there are signs it is starting to tick up.
Prices rose 0.2 percent in April, pushing the year-on-year
reading up to 1.6 percent - the largest gain since November
Evans said the Fed's 2 percent inflation target should not be
seen as a ceiling and could be higher.
He forecast U.S. economic growth of around 3 percent per quarter
for the rest of this year - possibly a little higher in the
current quarter - and said the inventory adjustments that hit
first quarter growth would not be a negative factor.
The Fed was expected to complete the tapering of its stimulus
plan by the end of this year, he said.
Fed policymakers began in April to lay groundwork for an
eventual retreat from their extraordinarily easy monetary policy
with a discussion of the tools they could employ to accomplish
the task, but no final decisions were taken, according to
minutes of the session released last month.
"The expectation is that tapering will be completed by the end
of this year," Evans told the conference.
Labour force participation had declined more than expected and
an uptick in the U.S. unemployment rate would not be a surprise,
he said, but added that this was already incorporated in the
central bank's outlook.
(Writing by Nick Tattersall; Editing by Hugh Lawson)
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