Tags: ELIZABETH DUKE | FED | BANKS | FINANCIAL SERVICES | ECONOMY | POLITICS | CHARLES EVENS

Fed's Evans: Interest Rates to Stay Low for Some Time

Tuesday, 08 Jun 2010 11:26 AM

Low inflation and high unemployment in the United States justify the Federal Reserve keeping benchmark interest rates ultra-low for "quite some time," Chicago Fed President Charles Evans said on Tuesday.

"We have a little bit more risk with the European situation; the (U.S.) outlook looks good but not so strong as to reduce the unemployment rate very quickly; I don't see inflationary pressures at the moment," Evans told business leaders in Chicago in response to an audience question.

"So I think we will continue to have an accommodative policy stance for quite some time," he said.

Evans, who is not a voter on the Fed's policy-setting Federal Open Market Committee this year, reiterated that the Fed's pledge to keep rates low for "an extended period" means about six months to him.

New rules aimed at protecting consumers from taking loans that land them in financial trouble are necessary to restore consumer confidence but will cut into a source of bank profitability, Federal Reserve Governor Elizabeth Duke said on Tuesday.

"While the additional protections for consumers are long overdue, they will require considerable changes in bankers' business practices and product pricing and design," Duke said in comments prepared for delivery to a banking conference in Hollywood, Florida.

"The changes reduce the ability to build profitability models around penalty pricing such as overdraft fees or raising rates on existing credit card balances," she said.

Duke did not discuss the outlook for monetary policy or the economy in her remarks.

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Low inflation and high unemployment in the United States justify the Federal Reserve keeping benchmark interest rates ultra-low for quite some time, Chicago Fed President Charles Evans said on Tuesday. We have a little bit more risk with the European situation; the...
ELIZABETH DUKE,FED,BANKS,FINANCIAL SERVICES,ECONOMY,POLITICS,CHARLES EVENS
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2010-26-08
Tuesday, 08 Jun 2010 11:26 AM
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