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UPDATE 1-Fed's Evans says U.S. economy doing well but inflation too low

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INDIANAPOLIS, Dec 18 (Reuters) - Chicago Federal Reserve Bank President Charles Evans said on Wednesday the U.S. economy is doing “remarkably well,” with a vibrant labor market and a strong consumer, but inflation remains worrisomely low.

Monetary policy is in “a good place,” Evans told the Economic Club of Indiana, using a phrase that Fed Chair Jerome Powell and others have also used to signal they see little need to adjust the level of interest rates in the foreseeable future. “I think we are well positioned to just sort of let things play out.”

But, he added, he is “personally worried” that inflation continues to run below the Fed’s 2% target, and the Fed should allow it to rise above that level so it can average 2% over time.

“We are looking for the economy to continue to grow, labor markets to continue to be strong,” Evans said. “It would take a lot of new data for me to change my opinion about that … inflation would have to go above 2% by some meaningful amount for me to really think that we need something more restrictive.”

Evans voted for all three Fed rate cuts this year, and also supported the decision earlier this month to leave interest rates where they are, in a target range between 1.5% and 1.75%.

Reporting by Ann Saphir; Editing by Chizu Nomiyama and Andrea Ricci