Inflation will remain below the Federal Reserve’s 2 percent target for the next few years, bolstering the case for keeping monetary policy accommodative, said Charles Evans, president of the Chicago Fed.

Higher wage growth is “an important part” of the outlook for inflation, Evans said in an interview with Mike McKee broadcast today on Bloomberg Television. “It could well be the case that it should be early 2016 before” the Fed raises the benchmark interest rate, he said.

“We need to get up to 2 percent in a sustainable fashion,” Bullard said in the interview from Jackson Hole, Wyoming. “Frankly, it’s not a catastrophe to overshoot inflation by some amount.”

The Chicago Fed chief’s outlook for inflation contrasts with that of the St. Louis Fed’s James Bullard, who predicted in an interview this week that inflation would exceed the central bank’s goal by the end of next year. The Fed’s preferred inflation gauge rose 1.8 percent in May and hasn’t exceeded the target for more than two years.

“We should be looking for wage growth to get up to 3.5 percent,” Evans said. “That would be a sign of sustainability” of inflation.

“Even a 2.4 percent inflation rate, if it’s reasonably well controlled, and the rest of the economy is doing OK, and then policy is being adjusted in order to keep that within a, under a 2.5 percent range, I think that can work out,” he said.

Job Market

With the labor market improving, the outlook for inflation is taking on greater importance as the Fed weighs when to increase its benchmark interest rate for the first time since 2006. Unemployment fell to an almost six-year low of 6.1 percent in June, government figures showed last week.

Inflation will likely run between 1.5 percent and 1.75 percent “for a couple of years,” said Evans. The lowest unemployment rate that wouldn’t cause inflation to accelerate is “in the 5 to 5.25 percent” range, he said, adding that “at 6.1 percent, we still have quite a ways to go.”