2018.03.1119:50:00UTC+00Fed’s Evans Strikes Dovish Tone on March Rate Hike

Chicago Federal Reserve Bank President Charles Evans argued against an interest rate increase on March, urging policy makers to hold off further tightening to allow inflation an opportunity to increase and even top the Fed's two percent target.

The Fed official expressed his view that the Fed should hold off hiking rates this month in a CNBC interview. He said there is a possibility that the Fed will observe inflation rising towards the 2 percent target, boosting their confidence and from there on continue an upward adjustment of the funds rate.

In another Bloomberg TV interview, Evans underlined this point, and said that while he also notes the significance of arguments for raising rates earlier, the Fed has the room to be “careful and patient” on rate hike increases given the low inflation.

The Fed is widely anticipated to hike rates later this month, and two more times before the end of the year. Traders held on to those expectations following a government report early Friday that showed job gains jumped in February but average hourly wages increased by just four cents, slower than anticipated.

Evans said in both interviews that the February jobs report was a positive news, but added that despite the strong hiring and the unemployment rate standing pat on 4.1 percent, he had expected wage growth to be stronger. He added that he would rather wait for inflation data for March before hiking rates.