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Fed’s Evans Favors Aiming for 2.5% Inflation in Bid for 2% Goal

  • Evans says achieving 2% average inflation will take ‘years’
  • Chicago Fed chief says unemployment could fall to 5% in 2021
Charles Evans
Charles EvansPhotographer: Alejandro Cegarra/Bloomberg
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Federal Reserve Bank of Chicago President Charles Evans said the U.S. central bank shouldn’t be shy about letting inflation run, as it has promised, above its 2% target in order to make up for years of undershooting that goal.

“If we try to fine-tune a very modest inflation overshoot of only a 10th or two, we run a very large risk of failing to achieve our 2% averaging goal within any reasonable amount of time,” Evans said Monday during a virtual presentation to the annual meeting of the American Economics Association.