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"There is a natural tendency for policymakers to pull back on accommodation too early before the real rate of interest has fallen to low enough levels"
- Charles Evans, Chicago Fed President
The U.S. Federal Reserve should keep interest rates near zero to combat high unemployment and help the economy to recover, said Fed's top official on Wednesday.
"There is a natural tendency for policymakers to pull back on accommodation too early before the real rate of interest has fallen to low enough levels," said Chicago Fed President Charles Evans. "It is essential that the Fed clearly commit to a policy action that is measurable against our goals."
Evan also told he favors the Fed's decision to announce rate forecasts. "Households and businesses will be able to make better-informed decisions if they have a clearer notion of future policy rates. The potential for reduced uncertainty could also lower the risk premium embedded in longer-term interest rates."