The economy is improving “gradually” and despite uncertainty, there is evidence the recovery is becoming “self-sustaining,” Federal Reserve Bank of Cleveland president Sandra Pianalto said Monday.

But headwinds remain, Pianalto told the Economic Roundtable of the Ohio Valley, according to a text released by the Fed.

The Fed’s statement that it expects to keep short-term interest rates at exceptionally low levels at least through late 2014 “is not a commitment to keep the federal funds rate at its current level until late 2014,” Pianalto said. “Rather, it is an expression of what the [Federal Open Market Committee] judges to be the earliest time that we would likely raise interest rates based on our current economic outlook.”

“I believe that our accommodative monetary policy has put the economy on a path, albeit gradual, that will achieve our maximum employment objective while maintaining price stability,” she added.

Easing monetary policy further could jeopardize price stability, while tightening too quickly may shatter “the momentum of the expansion” and cause disinflation, Pianalto said.

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