Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Lockhart, Evans Differ Over Inflation Reaching 3%

May 1 (Bloomberg) -- 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.

To contact the reporters on this story: Caroline Salas Gage in New York at salas1@bloomberg.net; Nadja Brandt in Los Angeles at nbrandt@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.