(Reuters) - The U.S. economic recovery is "frustratingly slow" and it could take four to five years to ratchet the unemployment rate down to about 6 percent, from more than 8 percent now, a top U.S. Federal Reserve official said on Tuesday.
The recovery is held back by "a number of headwinds" including housing and Europe, but monetary policy is now appropriately positioned to eventually achieve this "maximum employment" level, said Cleveland Fed President Sandra Pianalto.
"We do not have a good deal of concrete history for monetary policy to fit our current circumstances, but I am confident the Federal Reserve is making the most of its tools to move the economy in the right direction," the Fed official said at an economic development meeting in Westfield Center, Ohio.
Pianalto, a voter this year on the Fed's policy-setting panel, is a moderate dove in line with Chairman Ben Bernanke's core of policymakers who have taken aggressive action to bring down unemployment, which stands at 8.3 percent and was above 9 percent last year.
The U.S. central bank in late 2008 slashed interest rates to near zero and has since bought $2.3 trillion in long-term securities in an unprecedented drive to spur growth and revive the economy after the worst recession in decades.
Despite recent signs the recovery is gaining traction, the overall recovery has been slow, leading to debate both within and without the Fed over the need for additional asset purchases, including possibly mortgage-based bonds.
Pianalto did not tip her hand on that particular debate.
Looking ahead, Pianalto said she expects a "moderate economic recovery" with growth of about 2.5 percent this year and about 3 percent next year. Inflation should remain close to 2 percent for the next few years, she said.
U.S. gross domestic product grew just 1.7 percent in 2011. After a policy-setting meeting last month, the Fed said it expects GDP of 2.2 percent to 2.7 percent this year.
"Housing markets continue to be depressed. The government sector has been reducing spending and employment," Pianalto said in describing the economy's headwinds. "Add to the mix the situation in Europe, which could negatively impact our exports."
(Reporting by Jonathan Spicer in New York; Editing by Diane Craft)