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Charles Evans, president of the Federal Reserve Bank of Chicago, is the latest central bank official making headlines ahead of next week’s policy making. In keeping with other Fed rhetoric, he doesn’t sound like a policy maker who’s prepared to push a lot harder to stimulate the economy, for now at least.

Evans

Here’s his money quote:

“I expect to see further deterioration in some areas, notably job market conditions, before our policies gain full traction. Weak economic news by itself would not imply that we have misjudged the size of our latest actions. In my view, it would take a significant deterioration relative to our outlook for me to view our current policies as inadequate.”

In other words, he’s not inclined to dial up the Fed’s asset purchase programs unless the outlook deteriorates substantially.

Mr. Evans’s view matters, because he is a voting member of the Federal Open Market Committee, the policy making arm of the central bank, on which regional bank presidents serve on a rotating basis.

He also had a noteworthy take on inflation, which hasn’t fallen as much as many Fed officials expected a few months ago.

“A high unemployment rate and low rates of capacity usage, such as we now have, normally place strong downward pressure on costs and tend to lower inflation,” he said. “Indeed, some statistical models have pointed to possible deflation risks in the quarters ahead. But inflation has not fallen to the extent we might have feared; and there is another factor that could come into play, namely consumers’ and businesses’ expectations of future inflation. So far, expectations as measured by surveys have remained relatively stable, which is a bit of a surprise considering the severity of the downturn. But as economic conditions improve consumers and businesses might expect upward pressure on inflation; and experience shows that a rise in inflation expectations, once solidified, becomes embedded in many economic decisions and makes inflation harder to control.”

With inflation and inflation expectations not falling as much as Fed officials expected, the central bank has added reason to be cautious about easing policy more aggressively.