FILE PHOTO: Chicago Federal Reserve Bank President Charles Evans takes a question during a round table with the media in Shanghai, China March 23, 2010. REUTERS/Nir Elias/File Photo

NEW YORK (Reuters) - With inflation stubbornly soft despite a 16-year low in the U.S. unemployment rate, the Federal Reserve should move only slowly to raise interest rates and trim its massive bond portfolio, Chicago Fed President Charles Evans said Monday.

“I don’t want to get hung up over small differences” between whether the Fed raises rates two, three or four times over the course of 2017, Evans said in remarks prepared for delivery to Money Marketeers of New York University. “The important feature is that the current environment supports very gradual rate hikes and slow preset reductions in our balance sheet.”

Repeating much of a similar talk he gave in May, Evans said that while the Fed had essentially achieved its goal of full employment, it has had a “serious policy outcome miss” on its other goal of 2-percent inflation.

Unemployment fell to 4.3 percent in May, below what many Fed officials say is sustainable in the long run. But inflation, which by the Fed’s preferred gauge fell to 1.5 percent in April, has run below the Fed’s 2-percent target for years.

Despite his warning on too-low inflation, Evans last week cast his vote with the 8-1 majority at the Fed who supported lifting the target range for short-term interest rates by a quarter of a percentage point. Interest rate hikes are typically aimed at slowing growth and inflation.

Fed officials also reaffirmed their expectation of one more rate hike in 2017, bringing the total for the year to three, and said they expect to begin allowing the $4.5 trillion balance sheet to shrink by an initial $10 billion a month. On the margin, a smaller Fed balance sheet delivers less downward pressure on longer-run borrowing costs.

“It remains to be seen whether there will be two rate hikes this year, or three, or four—or exactly when we start paring back reinvestments of maturing assets,” Evans said. “Ultimately, our exact actions will appropriately be driven by how events transpire to influence the outlook for achieving our policy goals.”