Chicago Federal Reserve President Charles Evans said the Troubled Asset Lending Facility program should begin within weeks.
The Federal Reserve announced Tuesday it would be expanding the program to take on as much as $1 trillion in assets, including mortgage-backed securities.
Speaking in Des Moines, Iowa, Evans said taking the toxic assets off banks' balance sheets should attract more private investment.
Evans said there are signs that fiscal and monetary policy actions taken by U.S. officials are reducing the strain financial markets, but that disturbances remain.
On the subject of further Fed initiative, Evans said the Federal Reserve is still open to buying long-term bonds. The idea was first mentioned by the Federal Reserve in December of last year. The next Federal Open Market Committee meeting is on March 17.
The state of the U.S. economy is a recession, not a depression, Evans added. He said he isn't too concerned about inflation, but advocated his support of setting an inflation target for the Federal Reserve to go by.
By Megan Ainscow and edited by Stephen Huebl
©CEP News Ltd. 2009