Chicago Federal Reserve Bank President Charles Evans said Friday that the central bank will keep interest rates near zero until late next year due to low inflation and high unemployment.
"I personally doubt that the funds rate is going to start to increase before the middle of 2015," he said at the Credit Suisse Asian Investment Conference in Hong Kong.
Evans said the current inflation rate of 1 percent calls for continuing policy accommodation. "When we get up to 2% inflation, we will revert to more normal monetary policy," he said.
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He predicted the federal funds rate would be at 1.25 percent at the end of 2016.
Evens's remarks were seen by some to be distancing himself from Federal Reserve Chairwoman Janet Yellen, who stirred up financial markets last week when she said that a rate hike could come six months after the central bank finishes its asset-buying stimulus program, which is likely to be before the end of this year.
Evans was the first to advocate keeping interest rates near zero until unemployment dropped to at least 6.5 percent.
In a speech last month, he defended what he called a "goal-oriented monetary policy strategy," meaning the Fed should establish economic objectives such as lower unemployment and 2 percent inflation and then implement measures to achieve them.
In an interview with MarketWatch after the investment conference, Evans said he believed "appropriate monetary policy would be to hold off into early 2016 for the funds rate increase."
He also predicted that due to harsh weather early this year, GDP growth could dip to as low as 1.5 percent in the first quarter.
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