Fed's Lockhart: Progress towards inflation goal happening sooner than thought

Author: Adam Button | Category: Central Banks

Lockhart on Bloomberg TV

  • Inflation and retail sales mean economy stronger
  • Inflation will never be precisely 2% but around there
  • I find it encouraging that we're moving in the right direction
  • The economy is on path I expected, or a little stronger
  • If I were at March meeting, I would be persuadable on March hike
  • "I could probably go either way"
  • I premised two rates hikes at start of year. Whether it's two or three depends on the outlook
  • The Fed can hike in May. There is an ad hoc mechanism to call a press conference
  • Particularly this year, you have to assume the Fed could hike at a non-press conference meeting
  • I think we're close to full employment, waiting for further job improvement is not a good move
  • Protectionism could hurt economy if it gets out of hand
  • Strong US dollar is a factor that could constrain economy

Lockhart retires from the Atlanta Fed in 12 days so his comments have very little impact. That said, you could argue he has real insight into the Fed's thinking.

I'll miss Lockhart. His last real market-mover was in August when he started a head-fake on rates that was a low point for him. But he's always been candid and well spoken.