Evans: Policy caught ‘wrong footed’ on inflation but may not need to become restrictive

Feds Evans

Fed president Evans
  • Policy caught wrong-footed on inflation but may not need to become restrictive
  • ‘Substantial repositioning’ of policy could be done with low risk to jobs
  • Still feels much of current inflation due to supply and other pandemic shocks will ease
  • Underlying inflation still well-anchored

This is an important debate and it relates to how high rates can go. Evans sounds like he’s closer to the the 2-2.50% camp than the 3.50% camp that some commentators are talking about. That’s a profound difference for the dollar and risk assets but it’s not a debate that will be settled any time this year.

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