With huge resource gaps, slow growth and low inflation, the economic circumstances warrant extremely strong accommodation,” Evans said in remarks prepared for delivery to the Money Marketeers of New York University.

“The damage intensifies the longer that unemployment remains high. Failure to act aggressively now will lower the capacity of the economy for many years to come.”

“With inflation near target, relatively moderate economic growth expected for several more years, potential productive capacity at risk, and a symmetric 2 percent inflation target, we should resist the sirens’ call to prematurely raise rates or tighten our policy in any way,” Evans said.

“Instead, we should be providing more accommodation, in particular by better articulating the economic conditions under which our policy moves will be linked to the achievement of our mandated economic goals.”

Full article