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Jobless Rate Won't Fall to 6.5% Until Mid-2015: Fed's Evans

Thursday, 7 Feb 2013 | 8:42 AM ET
Fed's Evans: 'Monetary Policy Will Continue to Be Accommodative'
CNBC's Steve Liesman talks with Charles Evans, Chicago Federal Reserve Bank president, about quantitative easing, unemployment, and fixing the nation's debt.

The Federal Reserve has the appropriate policies in place right now and will remain accommodative until the economy improves, Chicago Fed President Charles Evans told CNBC in an interview on Thursday.

Evan said on "Squawk Box" he's optimistic that the economy is improving, but the unemployment rate probably won't get to 6.5 percent until mid-2015. The 6.5 percent target is what the Fed set as a goal for winding down its low interest rate policy. The latest jobless rate reading was 7.9 percent last month.

(Read More: Economy Adds Another 157,000 Jobs; Rate Up to 7.9%)

The Fed has not set any targets for how long it will keep going with quantitative easing (CNBC Explains), but Evans said the bond-buying program may need to continue for another six months to a year until "we're clear the job market outlook has improved."

(Read More: No Wall Street Consensus on When & How QE Ends)

He said he's looking for sustained growth of 200,000 non-farm jobs per month. "I'd love to see [a drop to] 7 percent unemployment sooner rather than later … I think it might possible to turn-off the quantitative easing … before 7 percent."

As for economic growth in 2013, Evans said, "I'm looking for 2.5 percent growth this year. That's against a 1 percent drag under the current law for fiscal policy." He's referring to the automatic across-the-board government spending cuts set to kick-in next month unless President Barack Obama and Republicans leaders can agree on a plan to replace this process known as "the sequester."

(Read More: Sequester Is 'Terrible, Terrible' Legislation: Rubin)

Evans did leave the door open to a greater-than-expected drag on the economy due to those spending reductions.

By CNBC's Matthew J. Belvedere; Follow him on Twitter @Matt_SquawkCNBC

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