Chicago Federal Reserve Bank President Charles Evans said on Tuesday, the US monetary policy needed some "repositioning" to align against risks.
US consumer spending strong amid tight labor market, faster wage growth.
US business sector has softened due to weak global demand, uncertainty over trade.
Sees 2.25% US gdp growth in 2019, US unemployment to stay at current level for some time.
Projects US inflation to rise to 2% target, slightly overshoot it over next few years.
US economic fundamentals "solid," costly risks "pronounced," progress on inflation "disappointing".
After rate cuts Fed should leave policy on hold "for some time".
There is a limit to what monetary policy can accomplish.
Sustainable US annual economic growth is about 1.75%.
Uncertain, hostile trade climate may weigh further on potential growth.
Fed has to have a "do-whatever-it-takes" approach to meeting mandates, especially 2% inflation goal.
Engineering modest inflation overshoot would not be policy error in current situation.
The USD Index holds the upside near 2.5-year highs on Evans’ comments, as the bulls regain the 99.50 barrier.
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