MNI: Fed's Evans Sees Tame Inflation Even With April Jump

Chicago Federal Reserve President Charles Evans said Tuesday he expects inflation pressures to remain tame even with a report Friday likely to show a jump in the PCE price index, and backed keeping the central bank's policy guidance in place to boost the economic rebound.

Gains in personal consumption expenditures and other inflation measures are largely driven by comparisons to weakness last year and supply bottlenecks as the economy re-opens, forces that are likely to be "transitory," Evans said in the text of a speech. Some of the price gains are helpful to the Fed, creating higher inflation expectations that will help with the central bank's goals, he said.

"I have not seen anything yet to persuade me to change my full support of our accommodative stance for monetary policy or our forward guidance about the path for policy," Evans, an FOMC voter, said in the speech.

Critics of the Fed's patient stance appear to be relying on long-ago inflation trends, while evidence from the last economic cycle where unemployment reached 3.5% without sparking big price gains seems much more likely, he said.