Evans Says U.S. Still Needs Fed QE Even With Brighter Outlook
Federal Reserve Bank of Chicago President Charles Evans said he is “optimistic” about U.S. growth in 2013 and next year, while cautioning that the economy still needs record monetary stimulus.
“I don’t think we should be complacent” about the economic outlook, Evans said today in a speech in Chicago. “Unemployment is unacceptably high.”
The Federal Open Market Committee said in March it will keep buying $85 billion in bonds each month until the labor market substantially improves. Evans, who votes on the FOMC this year, told reporters after the speech that he expects the Fed to keep the asset-purchase plan in place until at least late this year.
“I would not be surprised if we end up doing this until late 2013, ultimately ending the program in 2014 at some point,” he said.
The Chicago Fed chief said that while the value of the U.S. dollar fluctuates according to many economic factors, the currency has “surprised” people who expected it to depreciate more.
“It’s actually really quite strong, compared to other countries that are struggling a lot,” he said. “Any safe haven flows to the U.S. necessarily means the dollar appreciates.”
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