ATLANTA (Reuters) - While the U.S. economy is gaining strength as evidenced by lower unemployment and other positive recent economic data, it remains far from its ‘optimal condition,’ the president of the Atlanta Federal Reserve Dennis Lockhart said on Thursday.
Lockhart also said he still favors low-rate monetary policy even though at present low rates aren’t stimulating much credit growth.
“Given the circumstances of the economy, which I described earlier as still striving to get its legs, I continue to think the benefits of low-rate policy outweigh the risks,” Lockhart said in prepared remarks to a banking industry conference hosted by the Atlanta Fed.
He said inflation expectations appeared stable, but cautioned that rising gasoline prices and cost pressures “warrant a watchful eye for any shift in the underlying overall inflation trend.”
Reporting by Karen Jacobs; Editing by Chizu Nomiyama