May 11, 2020 / 5:30 PM / a month ago

Fed's Evans sees no inflation risk, and no use for negative rates

FILE PHOTO: Chicago Federal Reserve Bank President Charles Evans looks on during the Global Interdependence Center Members Delegation Event in Mexico City, Mexico, February 27, 2020. REUTERS/Edgard Garrido

(Reuters) - Chicago Federal Reserve Bank President Charles Evans on Monday said he sees interest rates staying near zero for “quite some time” to support the economy, but does not expect to resort to negative interest rates as central banks in other countries have done.

Evans also said a rise in inflation is unlikely over the next several years, and that with interest rates as low as they are, it is the right time for the federal government to borrow and spend to support businesses, households and local governments.

“I anticipate that interest rates are going to be low for quite some time,” Evans said at a virtual meeting of the Lansing Chamber of Commerce. The federal government is engaged in dramatic deficit spending, but with rates low, “this is the time to go out and borrow and engage in activities which have very high social rates of return in order to benefit the American people.’

Reporting by Ann Saphir; Editing by Andrea Ricci and Chizu Nomiyama

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