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Inflation would have to be much stronger for four rate hikes in 2017: Fed's Evans
March 27, 2017 / 7:36 PM / 9 months ago

Inflation would have to be much stronger for four rate hikes in 2017: Fed's Evans

MADRID (Reuters) - The case for four interest rate hikes in the United States this year is not yet solid and would require a stronger lift in inflation, Chicago Federal Reserve Bank President Charles Evans said at an event in Madrid.

Federal Reserve Bank of Chicago President Charles Evans speaks during a meeting in Madrid, Spain, March 27, 2017. REUTERS/Juan Medina

Evans said he saw three rate hikes in 2017 as “plausible”, but added that two or four increases were also a possibility.

“I don’t see the data, I don’t have the confidence,” Evans said, asked whether there was a strong case for a fourth rate hike. “If I thought that I was inclined to four rate hikes for 2017 I would presumably be seeing a much stronger lift in inflation, I think it would be accompanied by a meaningful increase in long term inflation expectations.”

Evans did not detail when he thought the Fed would start trimming its balance sheet, but said there was a discussion around not just when but also what the pace of the asset roll-offs should be.

“My own view is that we will get to the point where we are going (...) to start reducing the balance sheet and we should convey a sense that it is going to run off in a pretty disciplined, well-understood, perhaps controlled fashion,” Evans said.

Reporting by Sarah White and Jesus Aguado, Editing by Julien Toyer

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