By Michael S. Derby 

Chicago Fed leader Charles Evans kept the door open to an October rate cut in remarks Wednesday, but didn't indicate he was willing to walk through it yet.

The veteran central banker and member of the rate-setting Federal Open Market Committee said his outlook was in line with the central bank's official forecasts that held for no further change in rates this year. "I think policy probably is in a good place right now...the growth outlook is good, and we have policy accommodation in place to support rising inflation," he said.

But the official noted that he hasn't yet fully made up his mind in a time of greater uncertainty about the outlook. Mr. Evans' comments came from the text of speech to be presented in Peoria, Ill.

"There is some risk that the economy will have more difficulty navigating all the uncertainties out there or that unexpected downside shocks might hit," Mr. Evans said. "There is an argument for more accommodation now to provide some further risk management buffer against these potential events," Mr. Evans said.

As the Fed moves toward its Oct. 29-30 Federal Open Market Committee gathering, Mr. Evans said "I am keeping an open mind to these arguments, " which may or may not support another rate cut.

The Fed lowered its overnight target-rate range by a quarter-percentage point at both its July and September policy meetings. It is broadly expected to do it again in October, but Fed officials have refrained, by and large, from giving clear guidance about what they'd like to see. Mr. Evans has voted in favor of the rate cuts done so far this year.

In his remarks, Mr. Evans says he expects growth to hew toward its longer-run trend and come in just over 2%, "as continued strength in consumer spending offsets weakness in business outlays and net exports."

"I anticipate the unemployment rate to remain close to its current low level for some time -- and thus below that long-run benchmark of 4.2%," Mr. Evans said. He also said he looks for inflation "to move up slowly and then modestly overshoot our 2% target a couple years down the road."

(END) Dow Jones Newswires

October 16, 2019 10:59 ET (14:59 GMT)

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