The Fed is not achieving either part of its dual mandate, Federal Reserve Bank of Chicago president and chief executive officer Charles Evans said Wednesday.
Having dissented at recent Federal Open Market Committee meetings, Evans’ disagreement about Fed policy was widely known.
“Given the high unemployment rate and low job growth, I think it is clear that the Fed has fallen short in achieving its goal of maximum employment,” Evans told the Rotary Club of Lake Forest, Ill., and Lake Bluff, according to a prepared text of his remarks released by the Fed.
“As for the price-stability component of our dual mandate, the majority of FOMC participants — including me — judge that our objective is for overall inflation to average 2% over the medium term,” he said. “With my own view that inflation is likely to run below this rate over the next few years, I believe we will miss on our inflation objective as well.”
Traditionally, “when inflation is below target and real output is expected to be below potential,” accommodative monetary policy is the answer, he said.
“I support such accommodation today. And I believe the degree of accommodation should be substantial,” Evans said.
