Fed’s Evans says economy is “closer” to reaching stimulus reduction status – 27/09/2021

Biden says US is still coming out of Kovid-19's "economic collapse" - 05/07/2021

by Lindsay Dunsmuiro

(Reuters) – The US economy is close to restarting its bond-buying program to meet the Federal Reserve’s terms and it will happen soon if job gains continue, the Fed chairman said on Monday. Chicago, Charles Evans, the latest official to support the central bank’s exit from its crisis policies.

“I see the economy closer to reaching the standard of ‘more significant progress’ that we adopted in December,” Evans said in statements prepared for the annual conference of the National Association for Business Economics.

“If the flow of job improvements continues, it seems likely that these conditions will soon be met and a recession could begin.”

Evans has previously only said that he expects the Fed to reduce its current $120 billion monthly purchases this year, aimed at lowering long-term interest rates.

Last Wednesday, Fed Chair Jerome Powell indicated that the US central bank may begin easing stimulus in early November after a monetary policy meeting, in which the Fed kept interest rates close to zero, that the economy was in a “civilised state”. ” Employment was the report from the terms of the meeting. The next report will be released on October 8.

Since then, two Fed officials, Cleveland Fed Chair Loretta Meester and Kansas City Fed Chair Esther George, have said they see the economy already in sufficient shape to withdraw central bank support.

But unlike some of his colleagues, Evans is adamant in his view that current higher-than-expected inflation does not require an imminent interest rate hike as stimulus cuts are finalized.

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“I am more concerned that we will not generate enough inflation in 2023 and 2024 than we are likely to live with much higher (inflation),” Evans said. Will end next year.

About the author: Sarah Gracie

Sarahis a reporter covering Amazon. She previously covered tech and transportation, and she broke stories on Uber's finances, self-driving car program, and cultural crisis. Before that, she covered cybersecurity in finance. Sarah's work has appeared in The Wall Street Journal, Bloomberg, Politico, and the Houston Chronicle.

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