Mr. Lockhart, a top Fed official insists on the need to wait it out to see more evidence that the US economy can actually support full employment and the Fed’s target of 2 percent inflation.
Top Fed Reserve Official Lockhart Wants Interest Rates Unchanged For Now
He however added that he expected the central bank to raise interest rates sooner rather than later.
“I did support the view that it makes sense to look at a little more evidence of the progress toward our policy objectives,” said Mr. Lockhart in the central bank’s most recent statement from the September meeting.
Speaking at an event backed by the Florida Chamber Foundation, Mr. Lockhart made his statement in a prepared speech.
Lockhart who is set to retire as the Atlanta Fed Reserve president in February 2017 is not a voting member of the Fed’s policy setting group, the Federal Open Market Committee.
So far, the US job market has improved significantly with signs of a slight increase in employment.
However, Lockhart said in the long-term, labor participation would likely decline as an increasingly high number of Americans retire in the years to come.
This prediction on labor participation combined with moderate capital investments will likely facilitate the 2 percent yearly growth for the economy.
Lockhart added, “As labor participation declines amid a growing population and the economy witnesses a weakening of capital investments, the economy will struggle to achieve strong, significant growth.”
In its September 21 meeting, the Fed lowered its expectation for an interest rate increase in the coming year but hinted that a hike would take place before the end of 2016.
In a statement issued by the Federal Open Market Committee, the central bank was confident about economic growth but the present evidence was not enough to hike rates this month.