Chicago Federal Reserve Bank President Charles Evans said on Tuesday he favored strong central bank accommodation for a substantial period of time, as the U.S. economy looks to be moving sideways.

Evans told CNBC television he favored some of the most aggressive policy actions now being considered to boost the economic recovery and said that the U.S. Federal Reserve needed to clarify its policy intentions to get better results.

It's difficult to characterize the labor market as anything other than consistent with being in a recession, said Evans, adding the economy is really going sideways more than anything else.

I'm in favor of some of the most aggressive policy actions of anyone on the committee, added Evans, a noted policy dove who votes on the Fed's policy-setting Federal Open Market Committee this year.

Strong accommodation needs to be in place for a substantial period of time.

U.S. treasuries touched fresh session highs on Tuesday after Evans' comments. Gold futures extended gains as investors worried about U.S. economic growth and prospects of further stimulus measures by the Fed.

The U.S. jobless rate stood at 9.1 percent in July, prompting some expectations that the Fed will continue its unprecedented measures to stimulate the economy.

Evans' comments closely follow the annual Fed conference in Jackson Hole, Wyo., where Fed Chairman Ben Bernanke said the central bank is prepared to do more to foster a stronger economy, but did not elaborate on how.

The U.S. economy grew at a 1 percent annual rate in the second quarter after expanding only 0.4 percent during the first three months of the year. The Fed has held interest rates at near zero since December 2008 and earlier this month said it expected to keep rates steady for at least the next two years.

I think we would have been so much worse off if we had not had the accommodation that's been in place, Evans said.

Evans again urged the Fed to set targets that would clarify its policy intentions, suggesting that interest rates could remain low as long as medium term inflation remained below 3 percent and until employment falls to acceptable levels.

The central bank has bought $2.3 trillion in government and mortgage-related bonds to help the economy. Some have speculated recent weak economic data could prompt a third round of bond buying, known as quantitative easing, but such a move would likely meet political opposition both domestically and abroad.

Many analysts think more modest steps are likelier, such as reinvesting the Fed's securities holdings into longer maturities.

Also on Tuesday, Federal Reserve Bank of Minneapolis President Narayana Kocherlakota is set for a speech, while later in the day minutes from the Federal Open Market Committee meeting of August 9 are to be released.

(Reporting by Leah Schnurr and Jonathan Spicer; Editing by Padraic Cassidy)

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