Parts of the economy could deteriorate before the Fed's policies take hold and spur recovery, Federal Reserve Bank of Chicago president Charles L. Evans said yesterday.

"I expect to see further deterioration in some areas, notably job market conditions, before our policies gain full traction," Evans told the Executives' Club of Chicago, according to prepared text released by the Fed. "Weak economic news by itself would not imply that we have misjudged the size of our latest actions. In my view, it would take a significant deterioration relative to our outlook for me to view our current policies as inadequate."

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