-Dennis Lockhart, Atlanta Fed President
Atlanta Federal Reserve President Dennis Lockhart said that the UK's referendum on whether to leave the EU could "loom large" as the Fed weigh whether to hike interest rates at its next policy meeting. Lockhart underlined that Brexit could potentially lead to heightened global uncertainty. Yet, the policy maker added that the US economy could warrant a rate hike when the Federal Open Market Committee meets on June 14-15. Lockhart said the market seemed to be underestimating the odds of a rate lift in June. Investors currently only assign a 12% chance of such a move, according to pricing in interest rate futures contracts. Lockhart said two rate hikes this year are certainly possible. Lockhart is not a voting member of the Fed's FOMC, but his view is seen as a bellwether for what the majority on the central bank is thinking.
Also, San Francisco Fed President John Williams said he is optimistic about the US economy and was giving little weight to the slowdown in first quarter gross domestic product. However, Williams added that he would support an interest rate hike in June as long as he sees sturdy progress on the economy, inflation and jobs. Fed officials left their target range for the benchmark policy rate steady at 0.25% to 0.5% when they met last week, saying that they will "closely monitor" the world situation.
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