Fed’s Kashkari responds to Trump: There’s no politics involved in Fed meetings

There is no urgency for the Fed to raise rates at any particular meeting, Atlanta Fed president Dennis Lockhart said on Monday.

“If 1.6 percent inflation and 4.9 percent unemployment were all you knew about the economy, would you consider a policy setting one tick above the zero lower bound still appropriate?” “I think circumstances call for a lively discussion next week”.

“The interest rates are kept down by President Obama”, the GOP presidential candidate said. NY time from Governor Lael Brainard, who has argued for patience in raising rates, for final clues before the central bank enters its traditional self-imposed quiet period before a meeting.

Lockhart told a business group in Atlanta: “I believe the economy is sustaining sufficient momentum to substantially achieve the (Fed’s) monetary policy objectives in an acceptable medium-term time horizon”.

“In its fundamentals, the economy seems to be chugging along, not stalling out”, he said. In an essay published this Monday, the executive highlighted that the US labor market is about to become normal, but inflation is still below the target of two percent.

A number of Fed speakers have indicated a willingness to raise rates despite mixed economic data.

He said his overall outlook was for moderate economic growth, and while he views low growth as due largely to factors that cannot be affected by monetary policy, he said he saw as “curious” the suggestion that raising rates could somehow lift inflation.

The benchmark federal funds rate has been held in a target range of 0.25 percent to 0.5 percent since a hike in December that was the first increase in almost a decade.

On inflation, Lockhart said that although price pressures are still well below the Fed’s 2% target, but remains stable.