Chicago FED president Charles Evans reiterated his stance once more today, no rate hike in 2015 but first one in 2016. Chart courtesy Sober look.
- Mr. Evans said that he prefers overshooting the 2% inflation target in the medium term to guarantee that there is enough upward momentum in inflation to sustain rate hike. According to him unemployment is still higher by half a percentage point. So as per him, FED needs to continue being accommodative and not to rush things.
Charles Evans is a known dove in the FOMC committee and he is probably the most dovish member.
- In previous comments he said that he will be pursuing his colleagues to consider first rate hike in 2016. Notably market participants are also expecting first hike in January 2016, as measured from fed funds rate future.
Impact –
As of immediate, market is not to pay much attention to his remarks as though it remains unchanged from previous versions. However recent weakness in economic releases from the US to grow Charles Evans argument stronger and more members are likely to join his camp.
Dollar is to continue trading weak versus major counterparts. Dollar index is currently trading at 93.65, up 0.45% today. Major focus is on FOMC meeting in June, about one month from now.
The material has been provided by InstaForex Company – www.instaforex.com