NEW YORK, April 15 (Xinhua) -- Federal Reserve Bank of Chicago President Charles Evans said on Friday that low inflation and high unemployment both suggested that a continued easy U.S. monetary policy is needed.
Evans said this at the annual Hyman P. Minsky conference in New York, held by the Levy Economics Institute of Bard College. He also stressed that there was little evidence of emerging asset bubbles.
The Labor Department said its consumer price index increased 0. 5 percent in March, mainly driven by high food and gasoline price.
Evans stressed that as long as core inflation year over year is 1.5 percent or lower, he did not think a tightened policy was necessary.
"Even if there were stronger evidence of a bubble, I'm not convinced that leaning against it is good policy. Even if the Fed could accurately detect a bubble in real time, and even if we decided that a bubble-pricking exercise would be warranted, monetary policy is too blunt an instrument for this task," said Evans.
Recently, the U.S. stocks market keeps bullish and commodity prices hit sky high. Investors worried that the inflation risks were hovering around the U.S. economic recovery. Some of them believed that surging stock prices were the evidence of asset bubble risks.
However, Evans said he didn't think those hiking prices were evidence of an overheating asset market.
"It is still too early to determine whether commodity price spikes are playing a role," he added. Members of Fed kept arguing whether the quantitative easing plan should quit. Philadelphia Fed President Charles Plosser told Xinhua on Thursday that with hiking commodity prices, it was time to reverse ultra-supportive monetary policy.
Meanwhile, Richmond Fed President Jeffrey Lacker also said that the central bank must tighten credit before inflation becomes worse.
The Fed officials will state their economic forecasts and review the quantitative easing plan at the Fed's meeting on April 26 and 27.