In sign of more hawkish
Fed, Evans nods to three rate hikes
Send a link to a friend
[January 07, 2017]
By Ann Saphir and Jason Lange
CHICAGO (Reuters) - Chicago Federal Reserve
President Charles Evans said on Friday the central bank could raise
interest rates three times this year, faster than he had expected just a
few months ago and in line with the majority of his colleagues.
The comments from Evans, a voting member of the Fed's policy committee
this year, reinforced the view that the Fed could step up the pace of
its rate hiking campaign if the incoming Trump administration unleashed
a fiscal stimulus.
Evans has been an outspoken proponent of low-interest rate policy for
"I still think two (Fed rate hikes) is not an unreasonable expectation,"
Evans told reporters in Chicago, adding that if the economic data comes
in stronger than expected, "three is not going to be implausible."
Two other U.S. policymakers, Cleveland Fed President Loretta Mester and
Richmond Fed President Jeffrey Lacker, said Friday they would support
even faster rate hikes.
"Iíve been ... seeing a little more strength in the economy," Cleveland
Fed's Mester told Fox Business Network, adding that more than three rate
hikes this year is "probably" appropriate.
But Dallas Fed President Robert Kaplan said he supported a gradual and
patient path for hikes, arguing it was too early to know whether Trump
policies would boost economic growth.
Kaplan and Evans were in Chicago for an economics conference.
The Fed raised interest rates last month by a quarter of a point and
policymakers signaled they expect to raise rates three more times in
[to top of second column]
Chicago Federal Reserve President Charles Evans answers a question
at the Chicago Banking Symposium in Chicago, Illinois, United
States, June 3, 2015. REUTERS/Jim Young
Minutes from that meeting showed policymakers might signal an even more
aggressive path of rate increases if inflationary pressures rise.
Incoming President Donald Trump has promised to double America's pace of
economic growth and "rebuild" the country's infrastructure, and about half of
the Fed's 17 policymakers factored a fiscal stimulus into their economic
forecasts, according to the minutes.
Evans said he was among the policymakers including fiscal stimulus in his
forecasts, while Kaplan said he had yet to incorporate expectations of future
"I want to be judicious about that," Kaplan told reporters in Chicago, saying he
does not want to "prejudge what is going to be positive or what is going to be
Lacker said in a speech the Fed "may need to increase more briskly than markets
appear to expect."
Prices for interest rate futures contracts suggest investors are betting on two
or three rate hikes this year.
(Reporting by Ann Saphir and Jason Lange in Chicago and Lindsay Dunsmuir in
Washington; Editing by Chizu Nomiyama and Chris Reese)
[© 2017 Thomson Reuters. All rights
Copyright 2017 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.