May 21, 2019 / 4:46 PM / a month ago

Evans: Past inflation miss could be trouble for any new framework

FILE PHOTO: Charles Evans, president of the Federal Reserve Bank of Chicago, poses for a photo in Palm Beach, Florida, U.S. January 17, 2018. REUTERS/Ann Saphir/File Photo

ATLANTA (Reuters) - The Federal Reserve’s failure to meet its current inflation target could spell trouble for any effort to change to a new and even more aggressive system for managing the pace of price increases, Chicago Federal Reserve bank president Charles Evans said on Tuesday.

New strategies being debated at the Fed would make up for low inflation with faster inflation in the future, possibly prices increases of as much as 3 or even 4 percent in some years, Evans said - a level he said markets may be skeptical the Fed would ever allow. “I don’t know if they are really going to believe that we are going to follow through on this,” Evans said.

Reporting by Howard Schneider; Editing by Chizu Nomiyama

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