Evans Indicates Fed’s Easy Policy Will Continue

The President of the Federal Reserve Bank of Chicago, Charles Evans, on Monday, said that the Fed remains in need of maintaining its accommodative policy for the near future, Reuters reported.

“To meet our objectives and manage risks, the Fed’s policy stance will have to be accommodative for quite a while.”

“Economic agents should be prepared for a period of very low interest rates and an expansion of our balance sheet as we work to achieve both our dual mandate objectives.”

In addition, the Fed’s bond-buying and the low-interest rates are set to continue, until the economy recovers from the pandemic and the current subsidies are no longer needed.

“It looks like the health crisis will be brought under control as we move through the year.”

“It likely will take years to get average inflation up to 2 percent, which means monetary policy will be accommodative for a long time.”

“This translates into low-for-long policy rates, and indicates that the Fed likely will be continuing our current asset purchase program for a while as well.”