South By North Strategies, Ltd.

In a recent speech in Baton Rouge, LA, Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, spoke about the uncertain state of the American economy. From Lockhart’s speech:

So, to pull this together, a recovery of the national economy is proceeding but not yet with solid and sustainable underpinnings. Inflation appears restrained. The outlook from here is beset by somewhat more than normal uncertainty. There is a chance of overachieving forecasts of moderate growth and gradual reduction of unemployment, but at the same time there are notable risks. In my view, these circumstances suggest caution in moving away from policies designed to give the economy the best possible prospect of recovery with full employment. Adjustment of monetary policy will be needed eventually, but this is not the time.
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Recent developments make me even more convinced that current policy is appropriate. Financial markets and many businesses are more nervous today than a few weeks and months ago, and it’s my view that monetary policymakers should hold to a guarded policy stance and evaluate carefully the risk and reward of a change of policy.