The economic conditions are satisfactory and the financial markets are well-prepared for the Federal Reserve to increase interest rates next week, Atlanta Fed President Dennis Lockhart said Monday.
The economy is on a “solid, moderate path,” growing closer to 2 percent than 3 percent, Lockhart said on CNBC’s “Squawk Box.” Lockhart, a centrist, is a voting member on the Federal Open Market Committee policymaking group.
Lockhart said he expects “more of a gradual path” of rate increases once the initial hike happens. The fed funds overnight lending rate has been at near zero percent since December 2008 in the wake of the financial crisis.
But that gradual path will be debated by the financial markets every step of the way.
“It is sort of torture in a certain way,” Lockhart admitted. “We don’t know exactly how the economy is going to evolve. We can’t commit ourselves … in advance to a particular pattern or particular schedule.”
In the post-meeting policy statements, the targets for the level of the fed funds rate by FOMC participants is plotted in a chart that has come to be known as the dot plot.