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By Howard Schneider
WASHINGTON Aug 6 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
He said his focus was on growth and ensuring the recovery is
"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
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)