It is unlikely the United States will see either harmful deflation or great inflation, and it remains too early to begin raising the Fed funds rate target, Federal Reserve Bank of Chicago president Charles Evans said yesterday.

“Stimulative policies combined with the economy’s resilient market forces will, over time, reduce resource gaps,” he told the Council on Foreign Relations, according to prepared remarks of his speech released by the Fed. “Deflation has been averted. And as the economy continues to improve, and when we see rising inflation pressures, Fed policy will respond aggressively. Having said this, the main threat to these outcomes would be if clear danger signals were ignored or if central bank independence were compromised.”

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.