Conditions may allow for at least one rate increase this year, if projections are correct, Federal Reserve Bank of Atlanta President Dennis Lockhart said Tuesday.
"I caution against overreacting to the second-quarter headline growth number. Early indications of third-quarter GDP growth suggest a rebound. I don't believe momentum has stalled," Lockhart told the Rotary Club of Knoxville, Tenn., according to prepared text released by the Fed. "I remain confident about prospects in the second half of 2016 and 2017. I will be watching the incoming data closely for confirmation that the outlook I've presented here today remains valid. I'm not locked in to any policy position at this stage, but if my confidence in the economy proves to be justified, I think at least one increase of the policy rate could be appropriate later this year."
He noted that gross domestic product has shown slow growth, but he said, "Yet I, as one Fed policymaker, am not prepared to rule out at least one rate hike before year's end."
Price data released recently suggest underlying price pressures are firming, according to Lockhart, and He added he's "reasonably comfortable" inflation will hit the Fed's 2% target by the end of next year.
