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Richmond Fed President Jeffrey Lacker, who had advocated for a
rate hike in June and will have a vote at the Fed's Sept. 16-17
policy meeting, said the U.S. economy no longer needs interest
rates near zero.
"It's time to align our monetary policy with the significant
progress we have made," Lacker said in prepared remarks titled
"The Case Against Further Delay."
Lacker's comments came just minutes before the Labor Department
was due to release its monthly employment report for August,
which was expected to show robust job growth.
Several Fed policymakers have said the report would be critical
for the central bank's decision over whether to raise rates this
month.
But Lacker said the healing in the job market needed for a hike
have already materialized, even if the jobs report disappointed.
"It's quite unlikely that a one-month blip would materially
alter the labor market picture or, for that matter, the monetary
policy outlook," he said.
Lacker said the strongest evidence supporting higher rates was
that consumer spending had picked up substantially. This was
probably the result of stronger earnings by families and
expectations the economy would continue to improve.
The labor market was probably already at full strength, he said,
and there were already signs that wages could rise at a faster
clip.
"Over the last year or so, reports of difficulty finding and
hiring qualified workers have become notably more widespread and
persistent," he said, referring to reports in his region.
Lacker said no discussion of the economy's state would be
complete without considering recent volatility in financial
markets.
Worries over the strength of China's economy appear to have
prompted the volatility, he said, but he noted that developments
in China were unlikely to have a direct impact on U.S. economy.
(Reporting by Jason Lange; Editing by Chizu Nomiyama)
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