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"My
staff and I are getting close to a last review of the overall
picture suggested by the data," Lockhart said of the potentially
"historic" Fed session later this month that may approve the
first interest rate increase in nearly a decade.
The decision would mark a final end of sorts to the economic
crisis and recession that rocked the U.S. economy beginning in
2007, and led the Fed to slash rates to near zero seven years
ago.
Given unemployment at five percent, ongoing economic growth, and
an expectation that inflation will rise to the Fed's two percent
target, Lockhart said it would take a major negative turn of
events to change his opinion that the Fed's extended stay at the
zero lower bound should come to an end.
"Absent information that drastically changes the economic
picture and outlook, I feel the case for liftoff is compelling,"
Lockhart told a community group in Fort Lauderdale.
This could well be the week when the Fed cements its case for a
rate hike. Fed chair Janet Yellen speaks on the economic outlook
later on Wednesday before a Washington economics group, and on
Thursday to a joint Congressional committee.
The Labor Department's monthly jobs report on Friday will be a
key data point, with economists expecting that as many as
200,000 additional jobs were created in November.
A Reuters poll of over 80 economists taken after the October
jobs data were published found a median 70 percent probability
the Fed will raise rates on Dec 16. That is up from 55 percent
in a poll taken the month before, although Reuters polls have
been consistently predicting a December rate rise since the Fed
took a pass in September
(Reporting by Howard Schneider; Editing by Chizu Nomiyama)
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