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"If
1.6 percent inflation and 4.9 percent unemployment were all you
knew about the economy, would you consider a policy setting one
tick above the zero lower bound still appropriate?" Lockhart
said in a morning address at the National Association of
Business Economists. "I think circumstances call for a lively
discussion next week."
Lockhart has said recent data and contacts with business
officials in his southern region leave him confident that job
growth will continue and inflation eventually rise towards the
Fed's target.
Though not ruling out some of the more pessimistic arguments of
his colleagues who feel the economy may be in a low growth rut,
he regards the economy as "chugging along, not stalling out."
Growth should strengthen in the second half of the year, moving
towards a three percent annualized rate, he said. Though weak
inflation remains an "awkward" aspect of the Fed's policy
puzzle, he said he remains confident that will rise over time
because of still strong consumer spending and continued job
growth.
"Conditions warrant that serious discussion," when the Fed meets
next week, Lockhart said.
Several of the Fed's regional bank presidents have indicated
they are ready to raise rates again, even as some of the central
bank's influential Washington-based governors have indicated
they want to wait for more progress on inflation and to be sure
as slack in the labor market has disappeared.
(Reporting by Howard Schneider; Editing by Chizu Nomiyama)
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