The Federal Reserve’s decision not to raise interest rates last week but to wait until it is more confident that inflation is headed towards the central bank’s 2-percent goal is “appropriate,” a top Fed official said on Tuesday.
Calling the Fed’s current strategy a “wait and see” approach, Chicago Fed President Charles Evans, one of the U.S. central bank’s most dovish policymakers, said the Fed held off raising rates because it saw more risks to the outlook in March than it had back in December. That was when it raised rates for the first time in nearly a decade and signaled it could raise rates four more times this year.
Last week, the Fed left its economic forecasts largely unchanged since December, but most policymakers said they expected just two rate hikes this year.
