FORT LAUDERDALE, Fla. — Atlanta Federal Reserve Bank President Dennis Lockhart Thursday maintained his belief that the problems afflicting the economy are more cyclical than structural, but that scaling back asset purchases should be considered "over the coming year."
Taking questions from the audience after a speech to business leaders in Ft. Lauderdale, Florida, Lockhart said the Fed's balance sheet has ballooned as a result of its effort to support the recovery, but that it is a tradeoff between a "short-term benefit to the economy" and "getting the patient well sooner," vs. "uncertain longer term concerns."
Lockhart said as he thinks of the benefits compared to the costs, "until about now I've been in the position of believing the benefits certainly merit taking the risks that there might be some concerns over the longer term."
Still, Lockhart reiterated his prepared remarks that "I think the question of tapering off these purchases should now be on the table over the coming year."
On the debate about whether the problems facing the U.S. economy are cyclical vs. structural, Lockhart said he is on the side that believes it is more cyclical than structural.
"We may have some structural issues but that's not a deep impediment to the economy moving ahead," he said.
Lockhart said the U.S. economy has recovered "a lot of ground," but "it is a slow march, and a frustrating one ... . It's slow getting back."
The economy can get a "robust" recovery but it will take "a little while to get there."
The Fed is working hard to bring down unemployment rate "in a quantitative sense," but Lockhart said he is also monitoring developments from a qualitative standpoint, given, for example, the high number of those that are part-time for economic reasons.
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