Chicago Fed President Charles Evans is this year a voting FOMC member. Normally, that might not make much difference but in times like this where dissension is building beneath the surface of even the typically stoic central bank, this time it might. Apparently, we can count Evans among the list dissatisfied with the current state of monetary policy.
Speaking this week, the policymaker departed from the preferred narrative almost speaking directly to Janet Yellen (perhaps Jerome Powell and his confirmation hearings, too) using her word:
[W]ith each low monthly reading, it gets harder and harder for me to feel comfortable with the idea that the step-down last spring was simply transitory.
…something more persistent is holding down inflation today. Namely, I feel we are facing below-target inflation expectations.
In some (small) ways this is unfair to Yellen who inherited this mess from Bernanke. The previous Fed Chairman at least had the specter of further crisis with which to keep often intense disagreement in private. Not that Yellen really distinguished herself all that much then or now, but this is not a huge question mark blotting just her record.
Nor is Evans adding much to the debate, either. He’s basically citing the obvious, which only goes to show just how much and by how far the central bank has been reduced. When stating what is perfectly evident becomes progress the whole enterprise can only be corrupted down to its very foundation.
It’s been five and a half years, let me repeat that, five and a half years, since the Fed last met its definition of price stability. In any other profession, including politics, such a track record would have been met with a thorough housecleaning. Yet, the Fed persists. Some officials, I believe, can sense that its real institutional abilities, PR mainly, can only keep the hounds of reckoning at bay for so much longer before this central bank, already quite unpopular to more than just the populists, is caught up in righteous demands for real answers.
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