Fed's Evans repeats view that four rates hikes in 2016 is too much

CEDAR RAPIDS, Iowa (Reuters) - The Federal Reserve should raise rates only two or three times this year, a top U.S. central banker suggested Wednesday, given how hard it will likely be to lift inflation back up to the Fed's 2-percent target.

The Fed raised rates by a quarter of a percentage point in December, the first increase since the financial crisis, and signaled they would increase rates four more times this year, based on the median of their forecasts.

"I believe that policy should plan to follow an even shallower path for the federal funds rate than currently envisioned by the median (Fed) participant," Chicago Federal Reserve Bank President said in remarks prepared for delivery to the Corridor Economic Forecast Luncheon in Cedar Rapids, Iowa.

A chart of Fed policymakers' rate forecasts suggest four Fed officials would view two increases this year as appropriate; another three would favor three increases. The forecasters are not identified by name, though Evans has consistently been among the Fed's most dovish policymakers.

"I think appropriate policy is consistent with some of the most accommodative dots on the chart," he said, citing his concerns about inflation and worries that the costs of raising rates too quickly "far exceed" those of raising them too slowly.

Evans gave identical prepared remarks Thursday.

(Reporting by Ann Saphir; Editing by Chizu Nomiyama)

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