(Reuters) – Chicago Federal Reserve Bank President Charles Evans said on Friday he is “comfortable” with the Fed’s current pace of asset purchases and would likely be so for the next several months, until there’s more clarity on the outlook for the economy.
“I am not opposed to more accommodation – I’m just not exactly sure what the right timing is,” Evans told reporters, adding that it may be too early for him to even give further guidance on the Fed’s bond-buying plan.
“I don’t necessarily see a need for any changes at the moment,” he said.
But Evans did signal that, once a coronavirus vaccine rollout is underway and there’s more clarity on the approach to fiscal spending under the new Congress, probably by spring, he could see the need for doing more with the bond-buying program, especially if inflation expectations are too low.
“It could be the case that we just need more nominal accommodation, more monetary accommodation and that could mean the size of our balance, how we are taking duration out, is far more important than many of us have been arguing in the last several months and even years,” he said.
“I worry a little bit that since we struggled so mightily to get inflation above 2% … maybe the balance sheet needs to be substantially larger … it could be that there’s something much bigger that’s required in order to get inflation up above 2%.”
(Reporting by Ann Saphir, Editing by Franklin Paul and Chizu Nomiyama)