Chicago Fed President Charles Evans crossed the wires in the last hour, saying that the US economy is close to having met the Fed's bar for beginning to reduce its bond purchase program.
Additional quotes:
- If job market improvement continues, likely that the bar will be met soon and tapering can begin.
- A low unemployment rate should not dictate a change in policy rate if the inflation rate has not become undesirable.
- Inflation to date does not yet satisfy the Fed's overshooting criterion.
- Think long-run inflation expectations are still likely somewhat below target.
- The current surge in prices due to supply issues not leaving a worrisome imprint on long-run inflation expectations.
- Fed should focus on producing sustainable inflation that aligns longer-run inflation expectations with the 2% goal.
Market reaction:
The remarks remained supportive of the prevalent bullish sentiment surrounding the US dollar and pushed the yield on the benchmark 10-year US government bond closer to the 1.50% threshold.
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