Tags: federalreserve | economicgrowth | ratehike | dennislockhart

Fed's Lockhart: Sustained 3 Percent Growth Would Warrant Rate Hike

Wednesday, 02 April 2014 01:37 PM

The U.S. economy needs to be growing at roughly 3 percent in annual terms to justify a hike in interest rates by the Federal Reserve in the second half of next year, a top Fed policymaker said on Wednesday.

In comments to a business event in Miami, Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said he thinks the economy will perform that well beginning in the current quarter.

The faster economic growth, he said, would help some part-time workers get more hours at their jobs and also goad more people who are out of work to restart their job hunts. Lockhart said he thought growth would trend at around a 3 percent annual rate in the second quarter of this year "and beyond."

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Signs of weak growth in the first quarter, he said, would likely prove temporary because they were due to a severe winter.

Lockhart, who does not have a vote this year on the Fed's policy-setting panel but participates in its discussions, said quicker growth should be a key variable for the Fed raising overnight interest rates from their current rock-bottom levels near zero.

"If that progress fails to materialize, a later lift-off date than I am assuming will likely be appropriate," he said.

Lockhart is considered to be near the center of the central bank's policy spectrum, and his comments often reflect the views of the core decision-makers.

© 2020 Thomson/Reuters. All rights reserved.


   
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The U.S. economy needs to be growing at roughly 3 percent in annual terms to justify a hike in interest rates by the Federal Reserve in the second half of next year, a top Fed policymaker said on Wednesday.
federalreserve,economicgrowth,ratehike,dennislockhart
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2014-37-02
Wednesday, 02 April 2014 01:37 PM
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