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Chicago Fed's Evans: Take a Chance With More Stimulus

Federal Reserve Bank of Chicago President Charles Evans said Tuesday it was time to take more chances with monetary stimulus, citing a weak economy.

Chicago Federal Reserve President Charles Evans
Source: chicagofed.org
Chicago Federal Reserve President Charles Evans

"I’m advocating a more aggressive stance of monetary policy," he told CNBC. "I think we should be more aggressive and that frankly makes a lot of people nervous."

Evans was the lone dissenter at the Federal Reserve'slast meeting. He said the other Fed board governors want to watch and wait to see if more action is needed to keep interest rates low without spiking inflation.

"I just think that this is the time to stretch the boundaries a little bit more and take a few chances," he said.

"The economy needs more accommodation. I think the unemployment rate at 9 percent is unacceptably high," he said, noting that the jobless rate should be at 6 percent or less. "I think we should be doing as much as we can."

Evans said he was more worried that the U.S. central bank could repeat the errors of the 1930s than those of the 1970s.

"In the 1970s you had a wage growth. You had the wage/price spiral where prices would go up, workers would demand that wages go up to keep up, and it would keep spiraling upwards," Evans said. "I don’t know if anybody expects wages are going to go up to that extent that it’s gonna propel inflation higher."

If anything, Evans said, there is more downward pressure on wages, and he doesn't see that pushing inflation higher.

"It’s a different time period. You’re always tempted to fight the last war," he said. "The 1970s are the last war. I’m much more worried about the 30s experience in Japan the last 15 years."

— Reuters contributed to this report.