The president of the Federal Reserve Bank of Atlanta Dennis Lockhart believes that the United States economy will pick up the pace in the second quarter. He also thinks that raising interest rates in the June to September window is still realistic. As Lockhart was discussing the factors that are putting a downward pressure on the economy he said it “contributes to a situation of some ambiguity at the moment, but I do this this will pass.” This is extremely important because Lockhart will be a voting member of the Fed committee that sets the monetary policy. He also thinks the labor market is still looking up, noting that there was not a large amount of slack in the market.
During a speech in the evening on Monday, the Fed Vice Chairman Stanely Fischer said he thought the unemployment data to be more reliable than other measures of economic output such as domestic product. Mr. Lockhart said, “I take the point that our measurement of employment is methodologically probably a bit more precise, such as it is, than ot measurement of output. I think that does… suggest to me that, as we are looking at the data in a data-dependent mode over the coming weeks and months to make possibly a decision on (interest rate) lift –off, that focus on what’s happening in the employment numbers will be very important.”
He continued to comment on the regulator policy, saying he thinks the provision in the 2010 Dodd-Frank law, which calls for stricter supervision of banks with more than 50 billion dollars in assets, should be changed. Mr. Lockhart spoke at a conference on “shadow banking” and noted that when he deliberates about dangers in the non-bank sector he is more worried with the likelihood of bank-like runs or other forms of instability at money-market mutual funds and broker-dealers. What do you think about Mr. Lockhart’s statements? What does this say about the Fed?
<a href=”http://blogs.wsj.com/economics/2015/04/01/feds-lockhart-expects-economy-to-pick-up-in-second-quarter/?mod=WSJBlog&mod=marketbeat”>WSJ article</a>