Robust economic growth has allowed the Federal Reserve to return to its role as a "supporting actor" for economic growth, the head of the central bank's Chicago district said Wednesday.
Like Fed Chairman Jerome Powell a day before, Charles Evans gave high marks to where the recovery stands now and said it's time for the Fed to step back from the aggressive stance it took during the financial crisis and the years after. The Fed kept its benchmark interest rate near zero for seven years and instituted multiple rounds of bond purchases that took its balance sheet above $4.5 trillion.
"Given the strong near-term growth fundamentals and positive inflation outlook, it is time for the Fed to return to something akin to the conventional monetary policymaking of yesteryear," Evans said during a speech in London.
"Such policy will rely on gradual adjustments in interest rates to meet our mandated objectives of maximum employment and 2 percent inflation, rather than the unconventional tools we had to use in response to the financial crisis and ensuing Great Recession," he said.