Labor market slack substantially gone
Dennis Lockhart is making the case for a liftoff in December. Lockhart is the President of the Atlanta Fed. His comments from the text of a speech from Bern, Switzerland. He is a voting member of the FOMC this year.
- US central bank intended to shift market expectations of interest rate liftoff with last policy statement; they were successful
- Expects case for a rate hike will continue to strengthen between now and Feds December meeting
- Rate hike remains a close call and subject to incoming data.
- Case can be made that economy is rates and crisis era policies
- Case for liftoff will continue to firm up
- Not concerned the FOMC is behind the curve.
- Fed liftoff will soon be appropriate.
- Inflation expectations fairly well anchored
- Small forecast changes could warrant longer at 0%
- Fed adjustment after liftoff to be very gradual.
- Neutral rate. Around 0 is a reasonable estimate.
- Expects risk that faced FOMC in September/ October to subside
