WASHINGTON Atlanta Federal Reserve Bank President Dennis Lockhart said on Wednesday that despite recent strong U.S. economic growth he still feels the Fed should not raise interest rates until likely the second half of next year.
Speaking on CNBC, Lockhart said strong second-quarter gross domestic product growth was partly a rebound from the dismal start of the year and may not be sustained. More evidence is needed, Lockhart said, before he is convinced the economy is ready to absorb higher rates without a risk to the recovery.
"It is a little early to conclude that the economy is going to grow that fast in the third quarter," said Lockhart, who does not currently have a vote on the Fed's main policymaking committee. "Sometime mid-year, next year, onward is likely to be the right time ... I am still looking for an accumulation of validating data."
He said his focus was on growth and ensuring the recovery is maintained.
"I am just simply looking for more evidence that we are on the track that we think we are on ... and it is going to take a while to be sure of that," he said. There was little risk, he said, of a "breakout of inflation to the high side ... That is simply a low probability."
The debate at the Fed over a future rate hike has been intensifying, with one dissent at the U.S. central bank's latest rate-setting meeting and some policymakers becoming more vocal about the possible need to raise rates sooner as the economy strengthens.
Lockhart is considered a centrist in that debate and said in the interview that he was "slower on the trigger" than members like Dallas Federal Reserve President Richard Fisher who feel the Fed needs to act sooner.
(Reporting by Howard Schneider; Editing by Meredith Mazzilli and James Dalgleish)