Gold futures were lower Monday morning, while silver fell sharply amid speculation the Federal Reserve may raise interest rates this month.
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“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?”
“After relatively weak growth over the first half of the year, I expect a stronger second half”, Lockhart said to the National Association for Business Economics, citing the bank’s estimate. “I think circumstances call for a lively discussion next week”.
In a speech on Monday, Atlanta Fed President Lockhart stated that he believes the economy is sustaining sufficient momentum to sustainably achieve the FOMC’s monetary policy objectives in an acceptable medium-term time horizon.
On inflation, Lockhart said that although price pressures are still well below the Fed’s 2% target, but remains stable.
Lockhart’s assessment of current economic conditions, while notably positive, fell short of a full-throated argument for an immediate rate increase – which appeared to ease investors’ fears of a September spike.
Recent comments from committee members point to a division over the need to raise interest rates. Despite signs of continued weakness related overall economic growth, the USA labor market has continued to add jobs at a healthy clip.
“In its fundamentals, the economy seems to be chugging along, not stalling out”, he said. On balance, however, Lockhart was still leaning towards the optimistic case with a gradual rise in inflation likely rather than the alternative secular stagnation thesis.
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Earlier, Trump said the Fed is refraining from raising rates due to Obama’s influence.
