LONDON (MNI) - US unemployment is likely to peak around 10.5% and may not start to fall until summer 2010, Chicago Federal Reserve Bank president Charles Evans told the Financial Times.

Evans said he had been "a little surprised" unemployment hit 10.2%, and he had nudged up his up forecast for the jobless peak.

"Hopefully, by the summer we'll see that the unemployment rate has peaked and begun to decline", with it falling to around 9.5% by the end of next year.

On moneteary policy, Evans said the Fed's interest rate outlook was "highly conditional" and would "depend on the things like what we mentioned in our most recent statement".

Evans said the current outlook suggested the Fed should keep rates near zero for an extended period, with the first rate increase maybe not coming until mid-2010 or even 2011.

He said the near zero rate period could extend "easily into 2010 and frankly I wouldn't be surprised if that doesn't translate into at least the middle of 2010" - with the first rate increase coming in "late 2010, perhaps later in terms of 2011".