Chicago Federal Reserve President Charles Evans, noting “the outlook for inflation remains too low,” said inflation does not currently have enough upward momentum to justify raising interest rates before some time next year. He added rate increases should be very gradual after the initial increase, as reuters informs MHProNews.

Speaking to a Manufactured Housing Institute (MHI) forum in Chicago, he said, “A gradual path of normalization would balance both the various risks to my projections for the economy’s most likely path and the costs that would be involved in mitigating those risks.”

Like a handful of other Fed policymakers, Evans does not believe the Fed should raise interest rates next month, although economists believe it will happen in December.

Although employment has fallen to five percent, half of what it was during the recession, Evans said low oil prices and a strong dollar putting downward pressure on prices will likely keep inflation from reaching the two percent mark by the end of 2018.

Evans will have another chance to vote at the Dec. 15-16 Federal Reserve meeting before he moves on to a non-voting position in 2016. The Fed has maintained its near zero overnight interest rate since Dec. 2008.

He reiterated the importance of the rate hikes being slow regardless of when they begin, adding that the key interest rate should still be under one percent by the end of 2016. ##

(Image credit: United States Federal Reserve System)

Article submitted by Matthew J.Silver to Daily Business News-MHProNews.