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In
prepared remarks to a National Association of Realtors
conference here Lockhart did not speak to the likelihood of a
rate increase at the Fed meeting next month. His prepared
remarks were issued before the release of Friday's jobs report,
but Lockhart may speak to that when he delivers his address or
in questions later from audience members and reporters.
Lockhart said he felt the economy remained on track for moderate
growth of around two percent, allowing the Fed to move rates
higher - a bit at a time.
"I anticipate a very gradually rising interest rate environment
over the next two years...I do not see rates marching higher for
an extended period in a preprogrammed tightening campaign. The
economy does not call for that, at least not at this time,"
Lockhart said.
Because the Fed estimates that the neutral rate of interest for
the country has fallen, he said people in the housing and real
estate industries should not regard the current tightening cycle
as "ominous."
The federal funds rate and other interest rates are all likely
to remain below historical averages, while the housing industry
in general should benefit as millennials come off the sidelines
and begin buying homes. Any Fed rate increases, he said, would
be premised on continued economic growth, low unemployment, and
likely wage gains - all supportive of homebuying.
"When the rate environment does reach a steady state, mortgage
rates should still be low and affordable by historical
standards," he said.
(Reporting by Howard Schneider; Editing by Chizu Nomiyama)
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