Fed's Evans in Chicago:
- I think the fundamentals are really quite good
- Sees US unemployment at 4.75% by end of the year
- Trend growth rates in US economy lower than 10 years ago
- Lower energy prices are good for consumers
- International sector has been a drag on US growth
Evans is singing from the choir book today rather than his usual dovish slant. The market is noticing but it might only be a matter of time until he lets something slip on inflation staying low forever.
More:
- 2016 economic and financial risks somewhat higher than hoped
- 'Wait and see' approach is appropriate
- Projected Fed hike path is 'a pretty good setting'
"I used to be sort of on the lower side of those dots. I now think the median is a pretty good setting"
It sounds more and more like Evans is no longer the major dove at the Fed.
Onto the Q&A:
- Strong dollar is keeping US inflation down
- Raising interest rates won't necessarily boost yield curve
- We need interest rates to go up because the economy is stronger
- It's clear Chinese growth decelerating
- We're very close to employment mandate
- We pay attention to imports, exports
- US unemployment could decline further
- If we can be a little cautious, I think we have the capacity to do so
