Fed may not raise interest rates until 2024, Evans says

The Fed could move faster if inflation starts to steadily move upwards, he said.

Evans, who is a voting member of the Fed ‘s interest rate committee this year, is part of the majority of Fed officials who will not see the first rate increase until sometime 2023.

He said: “Inflation is the real test of whether or not it is time to pick it up.”

The Fed has said it needs to see inflation at 2% with the expectation that it will exceed it before raising rates.

In a discussion with reporters after his webinar, Evans said he would be comfortable with 2% inflation for a year and said he would not become anxious until inflation rises to 3%, and even just asking questions.

“Right now, this is the opportunity we can be patient with, and make sure we get inflation expectations up to a level where they can sustain more stable support at 2% inflation,” he said. e.

Former Finance Secretary Larry Summers has said he is concerned that the package will provide a major stimulus and additional infrastructure spending to “warm up” the economy. In response, Evans said he did not see how that would lead to an automatic increase to 3.5%.

Evans said the Fed would be moving “slowly” to raise interest rates which means monetary policy will remain relatively straightforward.

While many in the market are concerned about potentially higher inflation from the recent fiscal stimulus package, Evans noted that a slight rise in inflation at the U.S. central bank would be welcome.

“Inflation is not too good at all,” Evans said.

Evans was optimistic about the outlook, but said he was “concerned about the imbalance” in economic growth, with Black unemployment as high as white unemployment.

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