The Federal Reserve may need to be even more aggressive in its easing policies than it has been so far unless the economy shows significant improvement, Chicago Fed President Charles Evans told CNBC.
A jobless rate at 9.1 percentis "consistent with recession" while inflation is far from a worry, Evans said while defending both the central bank's previous actionsto stimulate conditions and his view that even more action along the lines of quantitative easing will be needed.
In his view, QE needs to stay in place until unemployment plunges to 7 percent or if inflation gets past 3 percent. Core inflation, which strips out food and transportation, is about 1.8 percent, though the number is 3.6 percent including the more volatile measures.
Evans is a voting member on the fed Open Market Committee and traditionally has been among its more dovish members when it comes to interest rates and inflation.
"Strong accommodation needs to be in place for a substantial period of time," he said. "If we could sort of make everybody understand that this is going to be in place for a longer period of time, we could knock out some of that restraint that comes about when people talk about premature tightening."
Since the financial crisis hit in 2008, the Fed has expanded its balance sheet past the $2.5 trillion mark and kept its funds rate near zero in an effort to stimulate the economy.
However, the housing market is worse than Great Depression levels, recent manufacturing readings have been around contraction levels and weekly jobless claims have stayed above 400,000.
Nevertheless, Evans said things would be worse without Fed intervention even while acknowleding that the economy has not achieved the "escape velocity" it need to establish a recovery.
"We would have been so much worse if we had not had the accommodation that has been in place, the additional accommodation that came with QE2," he said.
His comments come just weeks after the Fed took the unprecedented step of saying it would maintain its zero interest rate policy for at least two more years.
Critics say the low rates have fomented inflation, but Evans said that is not a concern. The question of easing and the low rates have stirred dissent within the Fed as well, with Philadelphia Fed President Charles Plosser recently telling CNBC that more QE is not needed.
"Given the way the economy is growing and inflationary pressures are not nearly as strong as a lot of people think, I think that there's room for accommodation," Evans said. "As long as medium-term inflation stays below 3 percent we could continue to have a low funds rate."