Oct 5 (Reuters) - Chicago Federal Reserve Bank President Charles Evans said on Wednesday that he is "less concerned" with when another rate hike occurs than he is on formulating inflation criteria for the pace of subsequent increases.
"I am less concerned about the timing of the next increase than I am about the path over the next three years," Evans said in prepared remarks on the U.S. economy at an event in Auckland, New Zealand.
Given his worries about persistently low inflation that remains below the Fed's 2 percent target, Evans also said he would like to see a change to the Fed's communications when they next raise rates to "indicate that subsequent increases will depend on seeing...changes in inflation indicators."
The Fed's preferred inflation measure stands at 1.7 percent and has been below the central bank's goal for more than four years.
Evans noted he wants to see solid evidence inflation is moving upwards on a sustained basis and have more confidence that inflation expectations are symmetrically aligned with the Fed's inflation target. A "very shallow" rate path is necessary to help spur that, he said.
The Fed is divided on the timing of another rate increase following an initial liftoff from near zero last December.
Evans, who gains a vote on the rate-setting committee in 2017, is among those policymakers repeatedly warning that rates should not rise fast or far in a low-rate, low-growth global environment that lacks inflationary pressures.
Other policymakers, including three who dissented on the Fed's decision to stand pat at its September meeting in favor of an immediate increase, fear the central bank getting behind the curve on inflation and that low rates could increase financial stability risks.
In his prepared remarks, Evans said his estimate of the so-called natural rate of unemployment is 4.7 percent and he expects the rate to drop to 4.25 percent by the end of 2019.
The current unemployment rate is 4.9 percent.
Underscoring his view that the Fed should run the labor market hot in order to spark higher inflation, Evans added that "undershooting the unemployment goal is a necessary feature of appropriate monetary policy" to raise inflation back to 2 percent "in a reasonably timely and sustainable fashion."
There are two more meetings this year on Nov. 1-2 and Dec. 13-14. Traders have all but ruled out a move at the November meeting given its proximity to the U.S. election. They are currently pricing in a 63 percent probability of a rate hike in December, according to data from CME Group.
Reporting by Lindsay Dunsmuir; Editing by Diane Craft