When: Today, Tuesday, November 15th at 11AM ET
Where: CNBC's “Squawk on the Street”
Following are excerpts from the unofficial transcript of a CNBC EXCLUSIVE interview with Chicago Federal Reserve President Charles Evans today on CNBC's "Squawk on the Street" (M-F, 9AM-12PM ET). All references must be sourced to CNBC.
EVANS ON THE ECONOMY
I THINK THE ECONOMY NEEDS MORE ACCOMMODATION. I THINK THE UNEMPLOYMENT RATE AT 9% IS UNACCEPTABLY HIGH. WE SHOULD BE MUCH CLOSER TO 6% OR LESS THAN THAT. THAT'S WHAT I THINK THE NATURAL RATE REALLY IS. SO, I THINK WE SHOULD BE DOING AS MUCH AS WE CAN. I THINK WE'VE DONE A LOT ALREADY. THERE IS STRONG ACCOMMODATION IN PLACE.
EVANS ON IMPEDIMENTS
THERE'S A LOT OF IMPEDIMENTS RIGHT NOW. MORTGAGE MARKET IS CLOGGED UP. LONG-TERM RATES HAVE GONE DOWN A LOT. WE'VE HAD AN EFFECT ON THAT PULSE OTHER FACTORS OF INTERVENE. NORMALLY WE WOULD HAVE A MORTGAGE REFINANCING WAVE THAT WOULD PUT A TREMENDOUS AMOUNT OF ADDITIONAL INCOME IN PEOPLE'S POCKETS BUT THAT'S HELD UP WITH THE PROBLEMS WITH UNDERWATER MORTGAGES AND THINGS LIKE THAT. THERE ARE WAYS TO REDUCE THE RISK AND IMPROVE THAT. IF WE WERE TO OPEN THAT UP, THEN POLICY WOULD VERY QUICKLY BECOME EVEN MORE ACCOMMODATIVE.
EVANS ON OUTSIDE THE CONSENSUS
THE FACT THAT I FIND MYSELF OUTSIDE OF THE CONSENSUS MEANS THAT THERE'S MORE CRITICAL MASS TOWARDS WAITING, SEEING IF THINGS, YOU KNOW, IMPROVE BEING READY TO TAKE MORE ACTION. I JUST THINK THAT THIS IS A TIME TO STRETCH BOUNDARIES A LITTLE MORE AND TAKE A FEW CHANCES. I'VE GOT SOME IDEAS ABOUT HOW, YOU KNOW, WE COULD BE MORE ACCOMMODATIVE AND YET HAVE A SAFEGUARD AGAINST HIGHER INFLATION.
EVANS ON THE ECONOMY 2
WE HAVE BEEN DISAPPOINTED SO MANY TIMES BEFORE. I AM AT THE POINT WHERE THE NORMAL FLOW OF MONTHLY DATA IS NOT INSTRUMENTAL IN MY VIEWS ON THE ECONOMY. I HAVE BEEN MORE OPTIMISTIC. LAST YEAR I THOUGHT WE WOULD ACHIEVE ESCAPE VELOCITY. IT DID NOT HAPPEN. WE ENTERED INTO QE2, I PUT OUR PROPOSAL FOR STATE CONTENT PRICE LEVEL TARGETING THAT WOULD ADD MORE ACCOMMODATION BUT QE2 WAS HELPFUL I THINK, AND NOW THIS YEAR WE'VE SEEN MORE OF THE SAME.
EVANS ON MONETARY POLICY
I'M ADVOCATING A MORE AGGRESSIVE STANCE OF MONETARY POLICY. I HAVE BEEN GLAD TO SEE WE'VE HAD MORE ACCOMMODATION. I JUST THINK WE SHOULD BE MORE AGGRESSIVE. THAT, FRANKLY, MAKES A LOT OF PEOPLE NERVOUS.
EVANS ON EUROPE
IN THE SAME WAY THAT LEHMAN FINANCIAL CRISIS IN THE U.S. AFFECTED THE GLOBAL ECONOMY, I THINK WE CLEARLY WOULD BE AT RISK FOR WHATEVER HAPPENS IN EUROPE COMING TO THE U.S. SO, I THINK THAT IT WOULD INCREASE RISK AVERSION AND CAUTION ON THE PART OF BUSINESSES AND FINANCIAL MARKETS AND CONSUMERS. IT COULD BE A BIG NEGATIVE.
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