At least one Federal Reserve policy maker sees no need to raise interest rates at a time when inflation is so low.
"I see no compelling reason for us to be in a hurry to tighten financial conditions until then," Chicago Fed President Charles Evans said to the Official Monetary and Financial Institutions Forum in London.
"Economic conditions are likely to evolve in a way such that it will be appropriate to hold off on raising short-term rates until 2016."
He worries that the rapid rise of the U.S. will continue hamper inflation, which Evans fears will not rise to the Fed's target level of 2 percent until 2018.
"Since last summer, the dollar has appreciated nearly 23 percent against major currencies," he said. "The stronger dollar presents a clear disinflationary pressure through its influence on U.S. import prices."
Raising rates too quickly could mean a deflationary spiral like the one that has crippled Japan, Evans warned.
"They've been suffering the consequences of that loss of credibility for a very long period of time," Evans said. "I'd rather see inflation go above 2% a little bit, maybe 2.5%, than having to worry about a situation like that."
Evans is among the more dovish members of the Fed. Some of his colleagues have been making remarks indicating they favor a mid-year rate hike.
Also in London this week, St. Louis Federal Reserve President James Bullard said that "Zero is no longer the appropriate interest rate for the U.S. economy."
Last week, the Fed's official policy statement removed a reference to being "patient" before tightening.
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May 22, 2026 14:46 ET Minutes of the latest Fed policy session was the highlight of the week along with survey data on the U.S. housing market. In Europe, survey data signaled the trends in the euro area private sector. Further, consumer price inflation data from the U.K. was in focus. In Asia, various economic indicators from China drew attention to the health of the economy.