Cohen, speaking at the Reuters Investment Outlook Summit in New York, said the Fed was likely do as little as possible for as long as possible, based on the economic data available to the U.S. central bank's economists.
Cohen said investors' fears of inflation are spectacularly premature, and that capital markets, including still-tight credit markets, are moving back toward normal.
She said U.S. corporate profitability could see a dramatic surge in the third and fourth quarters, compared with low baseline profits in the second half of 2008.
But Cohen said she does not expect a V-shaped economic recovery, and that the spunk seen earlier this decade in consumption growth will not resume.
She also said that history is likely to show that Fed Chairman Ben Bernanke has been an extraordinarily effective leader during the current crisis, the worst U.S. recession since World War Two.
(Reporting by Jonathan Stempel and Herbert Lash; editing by Jeffrey Benkoe)