Tuesday, October 05, 2010

Fed's Evans: Favors "much more [monetary] accommodation"

by Calculated Risk on 10/05/2010 12:59:00 PM

From a WSJ interview with Chicago Fed President Charles Evans, Jon Hilsenrath writes: Fed Official Calls for Aggressive Action

"In the last several months I've stared at our unemployment forecast and come to the conclusion that it's just not coming down nearly as quickly as it should," [Chicago Fed President Charles] Evans said in an interview with The Wall Street Journal Monday. "This is a far grimmer forecast than we ought to have," he added. As result, he said, he favors "much more [monetary] accommodation than we've put in place."
...
[Evans] has grown frustrated with a lack of progress in bringing down unemployment and is now forecasting inflation of 1% in 2012 and below 1.5% in 2013, well below his own 2% goal.
Although Evans is not a voting member of the FOMC this year, he will be next year.

According to the article, Evans is forecasting inflation to be below target for the next three years - and for the unemployment rate to remain very high. This month the Fed Presidents will present their revised forecasts, and I think the tone will be generally grim.