UPDATE 1-Looking back, Pianalto praises Fed stimulus
(Adds quotes, background on policy)
Feb 26 (Reuters) - A long-serving Federal Reserve policymaker on Wednesday praised the U.S. central bank's use of both asset purchases and so-called forward guidance on interest rates as effective tools that have helped the U.S. economy recover from recession.
Sandra Pianalto, who is stepping down at the end of May after 10 years as president of the Federal Reserve Bank of Cleveland, also predicted that new Fed Chair Janet Yellen would continue "building consensus and being open-minded" at policy-setting meetings in the years ahead.
To support the economic recovery from recession, the Fed has kept interest rates near zero for more than five years and is now buying $65 billion in bonds each month in its latest round of quantitative easing.
"Today we are in our third round of QE, and studies show that the asset purchases have succeeded in pushing down longer-term interest rates and have generally eased financial conditions," Pianalto said.
Turning to the Fed's promise to keep rates near zero until well after the U.S. unemployment rate falls below 6.5 percent, Pianalto said: "This unconventional tool has also proven itself effective."
The jobless rate currently stands at 6.6 percent.
The Fed has modestly trimmed its bond-buying program in each of the past two months, and it plans to raise rates some time next year as long as the economy continues to improve.
Pianalto, a Fed employee of more than 30 years, is a quiet centrist and strong backer of the aggressive monetary response to the 2007-2009 financial crisis. She has a vote on policy this year, though she has not dissented once in her time as a Fed regional president.
Loretta Mester, director of research at the Philadelphia branch of the central bank, will succeed Pianalto on June 1.
(Reporting by Jonathan Spicer; Editing by Leslie Adler)