Atlanta Federal Reserve Bank president Dennis Lockhart yesterday suggested that as far as he is concerned, the need to tighten monetary policy is far down the road and must await more convincing evidence that the private sector of the economy is reviving.
Lockhart, a voting member of the Fed’s policymaking Federal Open Market Committee, said that while the economy is “clearly” starting to bounce back, the recovery is uncertain, vulnerable, and still dependent upon government support.
Besides, he said, inflation is “well-contained” and inflation expectations are “stable.”
Fears about the size of the Fed’s balance sheet are “exaggerated,” he said, adding that the Fed has the tools needed to shrink it “when the time comes.” But that time has not arrived, Lockhart said in remarks prepared for the University of South Alabama in Mobile.
“I do not think that time has yet come, and to be consistent with my outlook, I think it may well be some time before a comprehensive exit need be underway,” he said.
— Market News International
