Fed’s Evans: See unemployment going below 4% before too long

Adding to his earlier comments, Chicago Fed President Charles Evans noted that the unemployment rate could go below 4% before too long.

Key quotes:

• The unemployment rate could go to 3.5% and be consistent with inflation still struggling to reach 2%.
• Still, early days to think that recent inflation increases will work their way into inflation expectations.
• Fed would have probably done what it did with asset purchases even without the new framework.

Market reaction:

The US Dollar Index held on to its modest intraday gains just below mid-93.00s, or one-month tops and was supported by the ongoing surge in the US Treasury bond yields/prospects for an early Fed rate hike.