Federal Reserve Bank of Atlanta president Dennis Lockhart views current monetary policy as appropriate and wants to keep all options open for the future, but he said that more asset purchases are not a "potent policy option" under the circumstances.
Lockhart said he favors keeping the federal funds rate target at zero to 25 basis points and "the balance sheet steady at current scale."
"I am skeptical that further asset purchases will produce much gain in terms of increased economic activity," Lockhart told a crowd at the University of Georgia. "I don't believe further bond purchasing by the Fed is a potent policy option, given the set of circumstances we currently face. But that is not to say that such a policy action would not be powerful and appropriate in other circumstances, and I don't think any option should be taken off the table."
The most prominent risk to the U.S. economy now, Lockhart said, is the ongoing sovereign debt crisis in Europe.