Chicago Federal Reserve Bank President Charles Evans said the hurdle for altering the Fed’s current $600 billion Treasury purchase plan is “high,” and that a tapering of the purchases is unlikely.
“It looks more and more to me like $600 billion is a good number,” Evans, 53, said today in an interview today with CNBC. “I continue to think the hurdle is pretty high” for changing the program and “we’re going to continue to need short-term interest rates to be low for an extended period of time.”
Rising oil prices are a “headwind for the real economy” and yet shouldn’t lead to higher underlying inflation, said Evans, who votes on the Federal Open Market Committee this year. The unemployment rate, which fell to 8.9 percent in February, is “a very welcome sign” and a “signal that the labor market is improving,” he said.
Treasury markets are “so deep and liquid that there doesn’t seem to be a need” to taper the purchases, Evans said. He has led the Chicago Fed since September 2007 and is one of only two regional Fed presidents who vote every other year, along with Cleveland Fed President Sandra Pianalto.
“I wouldn’t be surprised that if we decide to end it, we just end it,” he said, referring to the purchase plan.
© Copyright 2017 Bloomberg News. All rights reserved.