U.S. unemployment remains a cause for concern, a top U.S. Federal Reserve official said, adding that inflationary concerns are minimal.
Chicago Federal Reserve Bank President Charles Evans said he was very concerned about unemployment in the United States, predicting that the unemployment rate would rise above 9 percent by the end of the year.
He made the comments to reporters at a media briefing in Hong Kong on Tuesday.
Evans forecast the unemployment rate to contract, however, to 8 percent by the end of 2011 and then to 5 percent with an economic recovery.
The accommodative U.S. monetary policy remained appropriate, said Evans, who will not be a voter on the Fed's rate-setting panel this year.
The U.S. economy grew at a robust 5.9 percent in the last three months of 2009, fuelling recovery hopes and contributing to expectations the Fed may begin the process of tightening financial conditions after the crisis. But at its March policy-setting meeting the U.S. central bank reiterated that it would keep rates extraordinarily low for an extended period.
In an effort to combat the worst financial crisis in generations, the Fed not only cut interest rates effectively to zero, but also embarked on an unprecedented emergency program of asset purchases aimed at keeping borrowing costs low and cushioning the housing sector.