Atlanta’s Federal Reserve President Dennis Lockhart says September is still a strong possibility for raising interest rates.
“I think there is a high bar right now to not acting, speaking for myself,” Mr. Lockhart told The Wall Street Journal.
Lockhart thinks the economy is ready, and says it would take a serious blow to the economy to convince him otherwise. After its meeting last week, the Federal Reserve hinted that a rise was imminent, but declined to reveal any specific ideas of when. Lockhart’s comments are the most clear direction anyone in the Fed has given. Last week St. Louis Fed President James Bullard said the country is “in good shape” for a September increase. Lockhart is known to be a centrist, making him a good indicator of how the Fed will vote.
“It will take a significant deterioration in the economic picture for me to be disinclined to move ahead,” he said.
June’s unemployment rate sank to 5.3%, well below the 10% peak in 2009. Lockhart says he expects the economy to continue to improve in the third and fourth quarters this year. If unemployment sinks lower, inflation needs to rise. New data coming out in the next few weeks could mean little, unless it’s particularly weak, he says.
“I don’t think it would be a big policy error to wait somewhat longer,” he said. “I’m not one to quibble over one meeting or so. But I do think we are close. The economy is in a state of readiness for beginning normalization.”
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