* The question of when central bank will finally tighten
* Evans would 'welcome' more ECB easing to boost inflation
(New throughout, adds comments to reporters on rates,
background, adds byline)
By Jonathan Spicer
WASHINGTON, April 9 The Federal Reserve will
likely wait at least six months after ending a bond-buying
program before raising interest rates, and will only act that
quickly "if things really go well," a top U.S. central banker
said on Wednesday.
"It could be six, it could be 16 months," Chicago Fed
President Charles Evans told reporters on the sidelines of a
Levy Economics Institute forum.
Last month, Fed Chair Janet Yellen put the wait at "around
six months" depending on the economy. Her comment undercut
stocks and bonds and prompted economists to revise forecasts.
Traders and Wall Street economists now expect the first rate
hike to come around the middle of next year.
"If I had my druthers, I'd want more accommodation and I'd
push it into 2016," Evans said of the first rate hike, but "the
actual, most likely case I think is probably late 2015."
The Fed has kept rates near zero since the depths of the
recession in late 2008, and has bought some $3 trillion in bonds
to help lower U.S. borrowing costs. It has reduced its
bond-buying and expects to wind it down by the fall.
Evans said the current pace of reducing the bond purchases,
$10 billion at each Fed policy meeting, is "reasonable" and
takes the Fed "into the October timeframe" for shelving the
"I am confident that, depending on how the economic
circumstances come out, we'll keep interest rates low for quite
some period of time," he said.
WOULD WELCOME ECB EASING
Evans, a vocal policy dove, has long worried that the Fed
has been too timid in its efforts to lower employment and raise
inflation toward the central bank's targets.
"We're in a very low inflation global environment," he said.
"The eurozone well below 1 percent and Japan has been very low
for a long period of time, and I'm worried that there's
something more afoot" than just the U.S. or eurozone experience.
Asked about a possible further easing of policy by the
European Central Bank, he said: "Yes I think that would be quite
welcome," adding he would welcome "all actions that help
generate stronger world growth."
A fellow dove at the central bank, Minneapolis Fed President
Narayana Kocherlakota, has proposed lowering the interest rate
the Fed pays banks on excess reserves. The aim would be to
provide more accommodation and boost inflation from just above 1
Asked about this idea, Evans said he was willing to look at
the possibility, but noted that the Fed's policy-setting Federal
Open Market Committee has long considered it and has not acted.
(Additional reporting by Ann Saphir; Editing by Andrea Ricci
and David Gregorio)