Comments from Fed hawk Lockhart were expected later but came out early:
- Expects Q2 pickup in economic growth, likely liftoff in June-Sept window
- Fed will still have substantial control over short-term rates once liftoff begins
- Still feels there is considerable underutilization in labor markets
- Measurements of employment more accurate than those of economic growth and should be watched closely in deciding liftoff date
Noting the June-Sept window isn't new for Lockhart but his comments about the importance of employment dovetail with Yellen's speech on Friday where she expressed a preference for jobs data even over inflation and wage inflation numbers.
Today's soft ADP data is a sour start to the new quarter but it will take more than one data point to shake the Fed off an optimistic path.
