Fed's Lockhart on a Sept. Rate Hike: Deserves Serious Discussion
If the U.S. economy continues on the same path, a “serious discussion” about raising interest rates will be warranted at the FOMC’s September meeting, according to Atlanta Federal Reserve President Dennis Lockhart.
“Well, let me give you my sense of the economy very quickly. My sense of the economy is that the GDP number we saw for the second quarter really is not the total story. If you look within that number you see the effect of inventories. And if you exclude that, you look at real, final sales -- you see a more encouraging picture, a picture of a kind of steady, moderate growth economy. Not impressive but nonetheless steady,” Lockhart told the FOX Business Network’s Peter Barnes on Friday.
“If I see by the run-up to the FOMC meeting data that are kind of consistent with that picture, my position is we ought to have a serious discussion. That doesn’t mean necessarily even I am going to support it, but it deserves a serious discussion,” he said.
When asked specifically if the Fed is likely to move on rates this year, Lockhart said “[it] would be appropriate, providing we see the continuing pace of growth and the continuing progress toward our objectives.”
Lockhart also said he sees international risks as subsiding.
“Well, I’m always paying attention to risk possibilities out there that could develop. Brexit was one of course, that was very dramatic for a while, but it seems to have settled down. And in my case I’m more focused on domestic issues at the moment. China’s slowdown continues to have some frictions in their economy that have to be worked out. Banks in Europe, particularly Italian banks, are on the radar screen. But none of these are really dominant in my thinking at the moment.”