- Dennis Lockhart, Federal Reserve Bank of Atlanta President
Lawrence Summers, a former Treasury Secretary, opposed an interest rate hike this year, as it may risk bringing some parts of the financial system into crisis and leading to unpredictable and dangerous outcome. One of the biggest areas of concern is inflation, which is below the Fed's 2% goal and according to Summers an interest rate lift-off could have a negative impact. Moreover, the higher borrowing costs will also increase the value of the US Dollar, which in turn will make "US producers less competitive and pressuring the economies of our trading partners."
Meanwhile, Dennis Lockhart, Federal Reserve Bank of Atlanta President, continues to expect the interest rate hike this year, while saying that a stronger US Dollar, a weak Chinese Yuan as well as declining oil prices cloud the growth outlook. Within the US, however, the policy maker anticipates moderate job growth, increasing inflation and strong consumer spending. Moreover, Lockhart also predicts an improvement in business spending, excluding the energy sector, and gains both in wages and productivity. Amid an ongoing US stock market rout and concerns of China's hard landing, some economists have pushed back their expectations for a rate increase until later in the year, or even into 2016. Monday's panicked selloff even led to some talk of the Fed extending quantitative easing, rather than raising rates.
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