While refusing to opine on the remaining Federal Open Market Committee meetings for the year, Federal Reserve Bank of Atlanta President and Chief Executive Officer Dennis Lockhart Monday urged the panel engage in a "serious discussion" of a rate hike.
Lockhart is not a voting member this year.
"Notwithstanding a few recent weak monthly reports — from the Institute for Supply Management, for example — I am satisfied at this point that conditions warrant that serious discussion," Lockhart told the National Association for Business Economics annual meeting, according to prepared remarks released by the Fed.
Consumer spending has fueled a moderate pace of economic expansion, with the labor market staying positive, although it may slow as full employment is neared, he said. And, although inflation remains below target, "In its fundamentals, the economy seems to be chugging along, not stalling out."
Lockhart said, "My base case forecast is that inflation will trend toward target once the slack in our labor and product markets is sufficiently reduced. Given ongoing improvement in labor markets and output, I believe that process is continuing, and, therefore, confidence is justified."
However, he noted, "I acknowledge the need to consider other narratives. I cannot totally dismiss an alternative scenario that describes the economy as stuck in a state of relatively weak growth, low productivity growth, and soft inflation."
