Chicago Fed's Evans sounding dovish notes.......>

FED: Chicago Fed's Evans sounding dovish notes. From our Fed reporter: The

Federal Reserve may need to cut interest rates if inflation and inflation

expectations continue to run too low, Chicago Fed

President Charles Evans said Friday, adding that he is "uneasy" about the

outlook for inflation after a recent drop in core price measures.

- Some of the drop in core PCE inflation since December may be due to temporary

special factors, but "we don't want to be too dismissive of this development,"

he said. Underlying inflation trends may be "mired below 2%" and inflation

expectations remain lower than in the recent past.

- See MNI POLICY: Fed's Evans Says Policy May Need to be Loosened, 1515 BST