A “protracted period of poor economic performance” lie ahead as the economy faces many challenges despite a proactive stance by the Fed, which will eventually “support a recovery in economic growth,” according to Federal Reserve Bank of Chicago president Charles L. Evans.

“We have seen a number of indications that the traditional easing of monetary policy and the nontraditional policy actions are beginning to help the functioning of credit markets and reduce financial strains,” Evans told the CFA Society of Iowa, according to a text of his speech released by the Fed.

“The spreads on the interest rates charged for interbank lending and on commercial paper relative to the fed funds rate have come down appreciably since October, particularly at the one-month maturity. $156 billion of debt has been issued with FDIC guarantees, facilitating medium-term funding by eligible financial institutions. And the rates on conforming mortgages relative to Treasury bonds have declined since the Fed’s GSE purchase program was announced.”

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