Although he expects inflation in the 1.5% to 1.75% range in the near future, exceeding the Federal Reserve's 2% target wouldn't be "a catastrophe," Federal Reserve Bank of Chicago President Charles Evans said Friday.
"Frankly, it is not a catastrophe to overshoot inflation by some amount," Evans said in an interview on Bloomberg TV. He said he doesn't see inflation hitting 2% "for a few years," citing "pressures" that will restrain it.
"If we get above 2%, then that will be a sign that things are doing better," he said during the interview from a Jackson Hole, Wyo., conference that other Fed officials are attending.
“Even a 2.4 percent inflation rate, if it’s reasonably well controlled, and the rest of the economy is doing ok, and then policy is being adjusted in order to keep that within a, under a 2.5 percent range — I think that can work out,” he said.
Turning to the labor markets, Evans said there is still "a lot of slack," and there is "quite a way to go" to hit the 5% unemployment rate he considers "normal."
He the Fed might not have to raise interest rates before “early 2016.”
