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Home / Business / Evans of Fed says the yield curve must be nervous, but the US economy is solid. From Reuters

Evans of Fed says the yield curve must be nervous, but the US economy is solid. From Reuters




© Reuters. Charles Evans, president of the Federal Reserve Bank of Chicago, poses for a photo in Palm Beach

By Noah Sin

HONG KONG (Reuters) – President of the Federal Reserve Bank of Chicago, Charles Evans, said Monday it be understood by the markets Be nervous when the yield curve wears off, though he is still confident about the outlook for economic growth in the US.

In many countries that are a bad omen for the US economy, 1

0-year US Treasury yields continued to fall in Asia monthly rates on Monday, an inversion that has signaled the risk of an economic recession in the past ,

On Friday, the yield curve reversed for the first time since mid-2007.

Evans described the inversion as "pretty tight". "

" We need to take into account that there has been a long-term decline in long-term interest rates, "Evans said in comments by Credit Suisse (SIX 🙂 Asian Investment Conference in Hong Kong, days after the Fed signaled an end to its tightening and plans for further rate hikes abandoned in 2019.

"Some of these are structural and have to do with lower trend growth and lower real interest rates," said "I think in this environment, it's probably more natural for the yield curves to be a little flatter than in the past."

At the edge of the conference, Evans told CNBC in an interview that he could understand why investors were more "Watchful, waiting and looking," he added, adding that the Fed did the same, adding that the economic fundamentals are "good" and he r echne with a growth of about 2 percent.

"Your first reaction will be (wow)" wow, that's less than what we had, "and I think that's the message missing."

TIME TO PAUSE

With regard to monetary policy Prospects Evans said it was a good time for the US Federal Reserve to take a break and take a cautious stance, adding that it did not expect interest rate hikes until the second half of next year.

Evans, who is voting on interest rate policy this year, softened his tone a few months ago and said monetary policy was neither accommodative nor restrictive at this point.

"I understand that things hindered inflation a little and I want inflation to go up so it's my own path to not expect interest rates to rise until next year, probably in the second half," said Evans.

In January, he said The Fed raised interest rates three times in 2019, provided that the US economy remained strong.

Last week, the US Federal Reserve left interest rates in a range of 2.25% to 2.5%. New forecasts showed that 11 out of 17 Fed policy-makers did not expect interest rate changes for the remainder of the year (compared to only two in December).

This unexpectedly weak signal prompted the financial markets to quickly calculate next year's interest rate cut.

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