STONE MOUNTAIN, Ga. — Federal Reserve Bank of Atlanta president Dennis Lockhart said Wednesday he remains "comfortable" with the Federal Open Market Committee's expectation that the federal funds rate will need to stay near zero "at least through late 2014," but said he is "reticent" about a third round of large-scale asset purchases unless the economy weakens.
Lockhart, a voting member of the policymaking FOMC, didn't rule out the use of "sterilized quantitative easing" after the conclusion of the "maturity extension program" or "Operation Twist" at the end of June. But he poured cold water on the idea, indicating that there had been no serious discussion of it by the FOMC.
Some Fed officials have said the committee may have to raise the funds rate before late 2014, but Lockhart made clear he is not in that camp.
"I certainly wouldn't call [the late 2014 forward guidance] a mistake," he said. "We communicated a conditional statement. … I think that helped many decision-makers in the economy to build their own assumption about the rate environment. … I think that in that sense, it was positive."
"The 'through late 2014' language is still broadly aligned with our analysis of the economy and forecast," Lockhart said. "I'm comfortable with it."