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Federal Reserve Bank of Atlanta President Dennis Lockhart on the state of the economy and job growth and the potential for further action by the Feder...
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We're back with Dennis Lockhart the president of the federal reserve bank of of Atlanta here in Jackson Hole is a voting member of the FOMC and so we wanna continue our discussion with him.
On a monetary policy and the economy.
-- what is your read of the economy right now we've had some very mixed data points.
Over the last month.
And it's it's it's unclear there we are we.
We had a every and heading in the trouble or weakening strengthening -- -- stuff.
Well I do think it is unclear.
You know I'd sound -- there's been little firming in the recent.
Months.
-- relative to what we saw on the spurring.
I don't think we should make too much of that the monthly data move around of course and it's hard to judge a longer term trend from simply even a quarter's numbers.
But the that the -- have been.
A little bit more encouraging.
I I really don't think that's the question.
I think the question is.
Over the whole course of the recovery what track -- we appear to be on and I am increasingly convinced.
We're on about a 2%.
Growth track.
It is very anemic.
And is not producing.
Sufficient job gains to really bring down -- unemployment.
Level at any pace that we would consider to be.
Acceptable.
And so.
I think did we have to think about.
Whether or not there's something more the can be done it can can put -- economy on a different trajectory a different track.
And and one thing that that you might consider -- your upcoming meeting on September 12 according to the most recent minutes from the last meeting and in August.
Is adjusting the so called forward guidance -- right now the FOMC has.
Has announced that it plans to keep interest rates.
Exceptionally low through the end of point -- -- and in the minutes said that the -- you all -- college in -- talk about this on September 12.
What about that do you think that you think that you and the -- -- there are ready to pull the trigger -- Announcing a low rates through 4015 maybe -- sixty.
Why not gonna speculate on what the committee will decide.
In September but I I do think the the outlook.
Is.
Weak enough that certainly there could be a case for for standing there and it will be a base it will be based on the outlook and and so there is a certain degree of science involved we all put together our forecasts.
And our forecasts tell us something about what the conditions are likely to be forecast can be wrong we've obviously been wrong I've been wrong.
Many times in the past but you have to.
Basis on something and so we put together is scientifically as we can a forecast and it it indicates that.
The conditions for beginning to raise rates are not -- for -- for avail as early as C 2014.
Then that -- you sort of fall into that decision.
And -- and and the other bank presidents and other participants do this every quarter now and it's actually in the process of and re running back.
Many of us do it for every meeting forever and we have -- we have a team people who are.
Running models and and working forecasts to try to to to base -- much as possible base our judgment on on something that day is -- Right -- -- so so based on the data based on the Ford.
Forecasts that that will be determined determinant for.
Additional steps he says that such as the forward guidance and and maybe even again another -- additional -- it right what about had.
Europe.
Every day at -- it's different now we hear that next week the European Central Bank.
May announce that decide to start buying bonds of Spain and Italy.
They seem to be.
Working hard to try to contain the crisis.
-- achieving.
Well that is certainly they're taking action when they need to take action might my sense of it is that they.
Have not been able to pull together the political consensus to really deal with the problem -- -- totally comprehensive.
Get it off the table kind of way.
So they're dealing with problems as they arise and they're hoping for the best yen and obviously attracting the economic performance in the budget performance of the most troublesome of of their member states.
I think the way we have -- to view this in the United States is that this is going to be a prolonged problem and a prolonged process.
It's going to be part of our atmosphere that we that affects our economy to congress and a continuing -- yes.
Why we have you it turns out that the Atlanta district.
Includes.
Louisiana we you're watching.
Hurricane on a tropical storm Isaac impact of that.
What are your what are you hearing.
How how.
What is going to be the economic impact of this storm and how are fed and banking operations going.
Through this storm.
Well we that we have a branch in New Orleans and that branches responsible for providing cash to a certain zone within the southeast.
And we've activated some redundancy are back up plans using.
Birmingham as as a back -- -- to make sure that we can distribute cash to the banking system.
In situations like this you know there is a certain tendency to go to a bit more -- a cash economy sometimes.
Electricity is down or some for some reason people.
Are out of sorts -- need data capture money in order to do to survive we we learned a lot during the Katrina period about this.
And so we have I think -- very well organized approach to deal with an emergency this one is not critique Katrina.
And it's not a serious.
We.
As did my most recent report as of yesterday is we think our operation.
Is under good control.
And that we're gonna get through this just fine.
As regards.
Economic impact it's clearly an economic impact on Louisiana.
I don't think it will be severe.
Louisiana as a very resilient please believe me and bounces back.
Quickly and strongly from these kinds of things.
And we learned during Katrina that.
The that the overall economic impact on the country is simply not that great one storm doesn't really affect the national economy.
In a measurable way.
Dennis Lockhart federal reserve bank of Atlanta thanks for joining us some -- business.
Thank you very much Peter.
