Chicago Fed president says no more rate cuts necessary through 2020 because America's 'growth outlook is good'

• Chicago Fed President Charles Evans voted in favor of the September interest rate cut but doesn't see the need for additional stimulus through the end of 2020, according to his prepared remarks for a Wednesday speech in Peoria, Illinois.
• The central bank's "policy probably is in a good place right now" and the nation's "growth outlook is good," he said.
• Evans' statements clash with many Wall Street analysts who have already priced in additional rate cuts in 2019, with some expecting the Federal Open Market Committee to cut the benchmark rate when it meets October 29.
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Chicago Fed President Charles Evans finds the last two interest rate cuts "appropriate," but doesn't see the need for additional cuts through the end of 2020.

The central bank official voted in favor of the September 18 interest rate cut, but said "policy probably is in a good place right now" during a Wednesday speech in Peoria, Illinois.

The median forecast for Federal Open Market Committee members was for no more cuts through the end of 2020. Evans called his assessment "pretty much in line" with that outlook, which calls for one 25-basis-point cut in 2021 and another in 2022.

The nation's "growth outlook is good" and the central bank has policy prepared should inflation rise above desired levels, Evans said.

Evans' sentiments clash with many Wall Street analysts who have already priced additional rate cuts into their 2019 market projections. Threats from the US-China trade war and slowing global economic growth have prompted many economists to anticipate more rate lowerings in the near future. A lack of additional cuts through 2020 could disappoint investors seeking central bank stimulus.

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Evolving economic risks could shift FOMC sentiments, and members recognize Wall Street's hopes for further action, Evans said.

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

The committee next meets October 29 and 30. Though some hopes are high that the bank will pull its benchmark rate lower, Evans said the Fed can only do so much to boost markets.

"We need to acknowledge that there is a limit to what monetary policy alone can accomplish," he said, adding that inflation levels are below the central bank's target and additional monetary policy could improperly influence the metric.

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