NEW YORK (Reuters) - The U.S. economy is in a good place but the path of inflation will be important in deciding the future path of interest rates, Chicago Federal Reserve President Charles Evans said on Wednesday.
“I definitely think the U.S. economy is in a good place right now. I think the U.S. consumer has been very strong...I think we’re in a good place, I think policy is in a good place. I think we’ve made a nice adjustment,” Evans told reporters following an event at the Council of Foreign Relations in New York.
Ahead of the Fed’s policy meeting last week, Evans said he would not mind another interest rate cut and has supported the central bank’s decision to lower borrowing costs three times this year.
The Federal Reserve voted 8-2 to cut interest rates by a quarter percentage point at its October meeting to a target range of between 1.50% and 1.75% but signaled it would only lower rates again if there is a material deterioration in the U.S. economic outlook.
Evans did, however, point out that the current level of interest rates, in his view, would not be appropriate should there be a future negative shock to the U.S. economy.
“Our adjustments have not been anywhere large enough to change the dynamics substantially. If there was a big negative shock, we’d have to respond,” he said.
Evans also made clear that he believes the central bank needs to do better explaining that its 2% inflation...