Fed's Evans favors strong policy accommodation

Reuters

NEW YORK (Reuters) - Chicago Federal Reserve Bank President Charles Evans said on Tuesday he favored strong central bank accommodation for a substantial period of time, as the U.S. economy looks to be moving "sideways."

Evans told CNBC he favored some of the most aggressive policy actions on the table now being considered to boost the economic recovery, and said that the U.S. Federal Reserve needed to clarify its policy intentions.

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"It's difficult to characterize the labor market as anything other than consistent with being in a recession," said Evans, adding the economy is "really going sideways more than anything else.

"I'm in favor of some of the most aggressive policy actions of anyone on the Committee," added Evans, a noted policy dove who votes on the Fed's policy-setting Federal Open Market Committee this year.

Evans' comments come days after the annual Fed conference wrapped up in Jackson Hole, Wyo., where Fed Chairman Ben Bernanke said the central bank is prepared to do more to foster a stronger economy, but did not elaborate on how.

The U.S. economy grew at a 1 percent annual rate in the second quarter after expanding only 0.4 percent during the first three months of the year. The Fed has held interest rates at near zero since December 2008 and earlier this month said it expected to keep rates steady for at least the next two years.

"I think we would have been so much worse off if we had not had the accommodation that's been in place," Evans said.

Also on Tuesday, Federal Reserve Bank of Minneapolis President Narayana Kocherlakota is set for a speech, while later in the day minutes from the Federal Open Market Committee meeting of August 9 are to be released.

(Reporting by Leah Schnurr and Jonathan Spicer; Editing by Padraic Cassidy and W Simon )

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