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Fed’s Evans Sees Case for Holding Rates Until Inflation Hits 2%

  • Chicago Fed chief also sees case for two 2016 rate increases
  • More than two could cause financial-market turmoil, he says
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Fed's Evans on Inflation Targets and Rate Hikes

The Federal Reserve should consider holding off on additional interest-rate increases until inflation rises to the U.S. central bank’s target, said Federal Reserve Bank of Chicago President Charles Evans.

“In order to ensure confidence that the U.S. will get to 2 percent inflation, it may be best to hold off raising interest rates until core inflation is actually at 2 percent,” Evans said in remarks prepared for a speech Friday in London. “The downside inflation risks seem big -- losing credibility on the downside would make it all that more difficult to ever reach our inflation target. The upside risks on inflation seem smaller.”