Chicago Fed's Evans: Not at exit point yet (by Greg Robb)

WASHINGTON (MarketWatch) -- The Federal Reserve is not at the point where a change in the stance of monetary policy is appropriate, said Charles Evans, the president of the Chicago Fed said Monday. In a speech at the University of South Carolina, Evans rejected the view that the central bank is out of touch about higher gasoline and food prices. The Fed is more sanguine about inflation than some because an outbreak of higher prices is missing a key ingredient - higher wages, Evans said. In order for price increases to be sustained, demand must keep pace, he said. This means wages must grow. "If consumers cannot afford to pay higher prices, demand falls, putting downward pressure on prices," Evans said. A weak labor market will continue to exert important downward influences on inflationary pressures, he said.