The federal funds target rate will remain exceptionally low for an extended period, Federal Reserve Bank of Atlanta president and chief executive officer Dennis Lockhart said yesterday.
He said modest recovery and subdued inflation allow him to “fully support the message of the most recent Federal Open Market Committee statement to the effect that the fed funds target rate will remain exceptionally low for an extended period,” according to prepared text of remarks he delivered to the New York Association for Business Economics that was released by the Fed.
Recovery will be deterred by a weak banking sector that is slow to extend credit, subdued consumer spending, and “extremely cautious business investment in inventory and capital goods,” Lockhart said.
As for regulatory reform, he said: “Reform should be grounded in realism about the character of the global financial and banking system going forward as well as the ability to legislate away some disagreeable aspects.”
