All clear for lift-off…
In a Florida speech this morning, the president of the Atlanta Fed said he’s convinced that it’s time for the central bank to start raising its benchmark interest rate.
With improvement in the key economic metrics, the case for a change is strong, said Dennis Lockhart, president of the Federal Reserve Bank of Atlanta in the prepared text for a talk at the Broward Center for the Performing Arts in Fort Lauderdale.
“It’s been seven years since the federal funds rate was first set at effectively zero,” he said. “The public has come to know the potential first rate rise as ‘liftoff.’”
The Fed’s Open Market Committee meets in mid-December to decide whether to make changes in the Federal Funds Rate, the basic rate used by banks and other lenders to set many rates throughout the economy.
After emphasizing that he cannot predict what the Fed’s rate-setting committee will actually vote to do, Lockhart ticked off what he sees as the critical elements in a decision: Unemployment has fallen steadily, hiring has been solid, if not robust, growth has been regular and inflation has been muted, he said.
“There are two weeks to go, with additional data still to arrive,” he said. “That said, absent information that drastically changes the economic picture and outlook, I feel the case for liftoff is compelling.”