Weekly Update: Focus Turns to Pace of 2018 Hikes

Evans’s interview was the only communication from a policymaker to be made public in the past week. He came out more strongly against a December hike than in previous remarks, citing the balance of risks to the inflation outlook: “I’ve been looking at the data, and the data have not been strongly indicating that we should continue with a [December rate increase].” In his view, it would be prudent to wait until “mid-2018” to see if inflation improves enough to justify a further rate hike: “What if we just decided to wait until the middle of the year and if we saw inflation pick up, then we could do something?” He continued: “Maybe it’s time to stop and see whether inflation expectations are going to move in line with our 2 percent objective. And if the judgment was that we’re still likely to be underrunning our 2 percent objective, maybe we would stop briefly and assess for more information, maybe wait until mid-2018.” For this reason, we included him with Kashkari as likely dissents at this week’s FOMC meeting.