- Dennis Lockhart, Federal Reserve Bank of Atlanta
Dennis Lockhart, Federal Reserve Bank of Atlanta President, said the US central bank is close to hiking the interest rates, as the world's number one economy is "approaching an acceptable normal." However, Lockhart highlighted that the pace of subsequent rate increases should be gradual. The economic growth is expected to pick up in the second half of the year, while the labour market will continue to tighten that will likely to push up wages. The 12-month inflation remains very week, Lockhart added, but there were some signs that short-term inflation has been firming.
Meanwhile, the Labor Market Conditions Index compiled by the Fed dropped to 1.1 points last month, down from an upwardly revised 1.4 points in June. The measure averaged 1.17 points over the past three months, recovering from negative territory in spring. The labour market lost some steam this year due to weaker global growth, while a stronger Greenback added pressure on exporters and cheaper oil hurt investment in the energy sector. The Labor Department said last week that US economy created 215,000 jobs in July, and the unemployment rate remained at 5.3%, data Lockhart called "quite satisfactory." Fed officials recently said they wanted to see "some" further improvement in the labour market before lifting the benchmark rate from near zero.
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