Fed's Pianalto says ultra-low U.S. rates warranted

A bumpy U.S. recovery and subdued inflation warrant the Federal Reserve's promise to keep benchmark interest rates low for an extended period, a senior Federal Reserve official said on Thursday.

Despite early signs of recovery, the economy is still facing some significant headwinds that will limit the rate of growth we can expect for the next couple of years, Cleveland Federal Reserve Bank President Sandra Pianalto told the Bonita Springs Chamber of Commerce.

She said two major headwinds are prolonged unemployment and a heightened sense of caution among consumers and businesses.

Pianalto, who is a voter this year on the policy-setting panel of the Fed -- the U.S. central bank, said that that caution is driven by a deep uncertainty about the direction of the economy and where the 'new normal' or baseline might be.

(Editing by James Dalgleish)