Evans on inflation

By Peter Boockvar - September 9th, 2009, 9:02AM

Unfortunately the Federal Reserve Bank of Chicago’s website hasn’t posted Evans speech titled the “Great Inflation Debate” even though he’s already given it this morning but I’ll rely on newswire quotes to give you a gist of what he said. In response to the predominant inflation concern resulting from a doubling of the monetary base over the past year and a massive rise in bank reserves, he said we won’t get inflation until the velocity of money picks up through “more expansive bank lending.” But, when that does happen, “and when we see rising inflation pressures, Fed policy will respond aggressively” and not as methodically as in 2004. It does seem the Fed will be very patient in removing the extraordinary accommodation as he said rate hikes are “some time down the road.” Instead of ready, aim, fire, he said their response will be “prepare, monitor and act.”

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Category: MacroNotes.

Comments

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One Response to “Evans on inflation”

ben22 Says:
September 9th, 2009 at 11:37 am
ha ha ha

didn’t evans also say that there is much debate among those at the Fed about what inflation is? Really then, if there is debate about what it is, how can we believe with any confidence that the Fed will respond aggressively when they SEE it. Hard for all to see the same thing when the person sitting next to you at the table is looking for something else.