Federal Reserve Bank of Atlanta president Dennis Lockhart Monday said the recovery is becoming “increasingly well-established,” but that work has only begun on rectifying the “serious imbalances” remaining in the economy.

Lockhart, in remarks prepared for delivery in West Palm Beach, Fla., projected continued relatively modest growth in consumer spending and higher levels of savings, which he said will help reduce the U.S. trade deficit.

But he suggested that the greatest amount of work to be done lies in the federal budgetary realm.

He said the U.S. economy has passed from the “great moderation” through a “great recession” and is now in a period of “great rebalancing” — rebalancing of household finances, of the fiscal situation, and of financial regulation.

Noting that the economy has expanded for seven quarters, Lockhart said, “With each quarter, the recovery is increasingly well established.”

“However, underlying the recovery there remain serious imbalances that have not been corrected,” he said. “Work on correcting these has only recently begun.”

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.