Fed's Evans: May need to keep up QE3 for maybe a year -CNBC

Thu Feb 7, 2013 9:05am EST

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Feb 7 (Reuters) - The U.S. Federal Reserve may need to keep up its purchases of bonds through the end of this year or into the next to give the recovery the momentum it needs to achieve "escape velocity" from overly high unemployment, a top Fed official said on Thursday.

"I think we have pretty appropriate policies in place right now," Chicago Fed President Charles Evans said in an interview with CNBC.

"Once we get momentum and achieve escape velocity, either later this year or 2014, I think unemployment will move down with momentum."

Evans likened the Fed's $85 billion-a-month program of asset purchases, and its pledge to keep interest rates low until unemployment falls to 6.5 percent as long as inflation stays in check, to a "half marathon."

"The quantitative easing is to get it started; we are going to do that until we are clear that the labor market outlook is improved: that might be half a year, might be a whole year," he said. "I'm optimistic that the momentum is going to pick up this year."

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