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Report: Fed's Evans says more rate cuts may be necessary

The Federal Reserve may have to cut rates at least one more time to help boost inflation and guard against downside economic risks, Chicago Fed President Charles Evans said Aug. 7, according to Reuters.

Evans is a voter this year on the Federal Open Market Committee, and he supported its July 31 decision to cut rates by 25 basis points.

He told reporters in Chicago that sluggish inflation figures, which have remained below the Fed's 2% goal, are one reason for the Fed to cut interest rates further, Reuters reported.

Evans also said more policy easing could be warranted if heightened trade tensions end up dimming the U.S. growth outlook further, saying he is monitoring incoming data and business sentiment to gauge potentially negative effects.

The FOMC's next meeting will take place Sept. 17 and 18. Evans said the committee's decision to lower rates for the first time since the financial crisis was "substantial" and could provide a cushion against downside risks, according to Reuters.

A day earlier, St. Louis Fed President James Bullard said the Fed's rate cut, combined with its dovish shift earlier in the year, marked a "sea change" in monetary policy that Fed officials will have to evaluate.

Bullard said that while more rate cuts may be needed, he wants to see how the effects of the central bank's prior moves are rippling through the economy.

"It's not clear that you want to pile on, necessarily, at this juncture," he said. "You want to see how those previous moves are affecting the economy, but I wouldn't rule out more changes yet."