Chicago Federal Reserve Bank President Charles Evans said Monday there is still "quite a long ways to go" for the US recovery from the coronavirus crisis, adding that he expects the Fed to keep interest rates at their current near-zero level until perhaps into 2024.
"If the economy picks up next year and we get on top of the virus and the vaccines are very effective and they are deployed quickly and throughout, then we are going to be in a much better situation," Evans told the Iowa Bankers Association.
But that won't mean the Fed will take its foot off the monetary gas pedal.
Under a new policy strategy adopted just months ago, the Fed has vowed to keep interest rates near zero until the economy reaches full employment and inflation not only hits the Fed's 2% goal but is set to move above that.
With inflation in his view unlikely to reach 2% until late 2022 or even 2023, "we are not expecting the funds rate to be raised before 2023 - probably late, maybe even 2024 in my opinion," he said.
In the meantime, he said, the recovery could be sped up with a bit more help from the federal government, especially to those who have lost jobs and can't find new ones in sectors hard hit by the virus, and for state and local governments reeling from drops in tax revenue.
"A little extra fiscal support would take a lot of uncertainty out of the current situation," he said.