Economy

Still Uncertain on Rate Hike at Next Fed Meeting: Lockhart

WASHINGTON – Dennis Lockhart, President of the Atlanta Federal Reserve Bank, stated on Tuesday that it is premature to dismiss the possibility of an interest rate hike at the upcoming U.S. central bank meeting in September. He emphasized the importance of forthcoming economic data before making any decisions.

Lockhart mentioned, "At this point, I don’t rule out a rate increase at the next meeting or later in the year. We just have to wait and see how the data come in." Although he does not have a voting role in monetary policy this year, he believes the U.S. economy is performing better than the indicated 1.2 percent annualized growth rate for the second quarter suggests. He pointed out that strong consumer spending and inventory levels are contributing to a more positive economic outlook.

He added, "The situation is maybe a little bit ambiguous, but I can imagine conditions in which we could have a rate hike. I’d like to see the economy tell us that it’s OK to raise rates."

The Federal Reserve has maintained steady rates since their first increase in nearly a decade back in December. Financial markets have reduced expectations for any additional increases this year due to mixed signals regarding the U.S. economy and concerns over international growth.

Lockhart also commented on the ongoing implications of Britain’s exit from the European Union, indicating that it continues to pose medium-term risks, despite a decline in near-term concerns.

In addition, he expressed worries regarding what he described as relatively high valuations in financial markets. "Asset valuations are something that we have to continue to monitor and watch, and at the moment I would say they particularly deserve attention because they are relatively buoyant or relatively high," Lockhart said.

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