The U.S. economy is tentatively emerging from severe recession and inflation, as well as inflation expectations, are under control, Chicago Federal Reserve Bank President Charles Evans said on Friday.

Opening the Chicago Fed's financial literacy conference, Evans decried attacks on the central bank's monetary policy independence -- part of the political fallout from the lengthy financial crisis.

Confusion over the Fed's role is quite understandable, given the unconventional steps we have taken over the past two years to ensure liquidity flows in the wake of the financial crisis and the non-traditional monetary policy environment that we are in, said Evans.

Greater financial literacy helps the Fed to better explain its decisions and dispel misconceptions about the central bank, said Evans, who is a voting member of the Federal Open Market Committee in 2009.

We have an important responsibility to explain our policy actions to a broad and diverse public, he said.

The better the public understands the work of the Fed, the easier it will be for us to achieve our mission.

In general, Evans said, American consumers have relatively low rates of financial literacy and often lack a clear understanding of concepts such as inflation and compound interest.

When you don't understand what inflation is, or the risk that it presents to your financial well-being, then it is difficult to appreciate the importance of a Federal Reserve that can take politically unpopular steps to combat inflation, he said.

(Editing by Andrew Hay)

Inflation