Charles Evans, the President of Chicago Federal Reserve Bank, says the U.S. economy is going slow. Thus on Monday, he said that it is the correct time for the U.S. bank to pause and take a careful approach. Mr. Evans added that interest rates might not increase until the end of 2020. But he deprecated the probability of a recession. On Friday, worries about an inverted yield curve scared financial markets of the U.S. As the curve is an important recession symbol, it was understandable for markets to be worried about the curve. Still, Mr. Evans was confident about the perspective of U.S. economic growth.
Speaking at the Credit Suisse Asian Investment Conference in Hong Kong, the Fed president said the U.S. banks decision to pause before increasing interest rates was well judged. He added it is a time to stop, break and watch, and move forward towards progress. Mr. Evans said he still anticipated the next rate movement would be high, not low. He noted whenever the flat yield curve comes with slower growth. But he is looking forward to an increase of about 2% in 2019. The figure looks quite small, but as per Mr. Evans, it is relative to the trend of one-and-three-quarters. He admires it as a good growth rate.
He also revealed to the power in the U.S. labor market. Now only 3.8% of people are workless, while the previous figures suggest 4.4%. Previously, Mr. Evans stated amid a conference that the world’s largest economy remains strong. After looking at the inherent qualities of the U.S. economy, and the labor market, he feels it’s strong enough. But Mr. Evans said the Fed remained alert because of weaker economic growth. It continued to stay careful particularly in case of decreasing impacts of financial boost initiated by Donald Trump, the US President. In order to stop hiking interest rates, at the end of last year, the Fed experienced strong pressure from the financial markets.