ATLANTA, Ga. (Reuters) — The U.S. Federal
Reserve will probably wait to hike interest rates until at least six
months after it ends its bond-buying stimulus program, a top Fed
official said on Tuesday.
"(I) think that it's going to be longer than that," Dennis Lockhart,
president of the Federal Reserve Bank of Atlanta, told an investment
conference.
The Fed has kept overnight interest rates near zero since late 2008
to help the U.S. economy recover from a profound recession.
Signs of recovery in the jobs market led the U.S. central bank to
recently start winding down its bond-buying program, which is aimed
at pushing down borrowing costs. The Fed has made clear it will
continue to support the economy, and last week said it would keep
its benchmark rate near zero for a considerable time after it ended
the bond purchases.
Lockhart was commenting on a statement by Fed Chair Janet Yellen
last week that a considerable time meant around six months.
"That is a really a minimum, not a maximum," Lockhart said, while
qualifying his remarks as representing only his personal view.
Yellen, in a press conference following the first Fed policy meeting
that she chaired, said the Fed will probably end its bond-buying
program — known as QE3 because it is the Fed's third round of bond
buying — next fall.
Some investors took Yellen's comments to mean the Fed could raise
rates as soon as April.
Lockhart, who does not have a vote this year on the Fed's
policy-setting panel but participates in its discussions, is
considered to be near the center of the central bank's policy
spectrum, and his comments often reflect the views of the core
decision-makers.
On Tuesday, he said he remained troubled by persistently low rates
of inflation in the United States, although he expects the pace of
economic growth will pick up in the coming months. That outlook is
the fundamental reason why the central bank will want to raise rates
next year, he said.
(Reporting by Jason Lange; editing by Leslie Adler)
"(I) think that it's going to be longer than that," Dennis Lockhart,
president of the Federal Reserve Bank of Atlanta, told an investment
conference.
