Tags: Lockhart | Evans | Fed | Inflation

Lockhart, Evans Differ Over Fed Allowing Inflation to Reach 3%

Tuesday, 01 May 2012 02:36 PM

Federal Reserve Bank of Atlanta President Dennis Lockhart and Chicago’s Charles Evans disagreed over whether policy makers should let inflation rise to 3 percent as they try to spur growth.

Lockhart said that prices accelerating at a 3 percent rate or faster make him “pretty nervous,” while Evans said that the central bank’s 2 percent inflation target is “not a ceiling.” The Fed hasn’t done enough to describe its tolerance for inflation, Evans said. Both Fed presidents spoke on a panel in Beverly Hills, California.

“We do allow the possibility” that inflation will top 2 percent, Evans said. “We want a vibrant economy.”

Still, Evans said that the Federal Open Market Committee has “no taste” for policy that would allow inflation to run at a much higher rate, such as 6 percent.

“That would not be the right thing to do,” Evans said. “I certainly agree with that.”

Lockhart, who votes on the FOMC this year, reiterated his view that he’s “skeptical” additional bond buying by the central bank would strengthen the recovery.

Evans, who doesn’t vote on the FOMC in 2012, said he doesn’t “see the need” for “strong accommodation” going away until the U.S. economy expands at a 4 percent rate for some years.

“I think we’re going to need more of this,” Evans said.

© Copyright 2019 Bloomberg News. All rights reserved.

1Like our page
Tuesday, 01 May 2012 02:36 PM
Newsmax Media, Inc.

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved