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July 14, 2016
Fed's Lockhart, noting Brexit, urges patience on rates
Atlanta Federal Reserve Bank President Dennis Lockhart said the Fed should remain "cautious and patient" in the aftermath of the Brexit vote in the U.K., as the global economy reacts.
However, he told reporters that he could envision "circumstances in which at least one policy move could take place and possibly two," referring to potential interest rate hikes in 2016, according to Reuters.
During his speech Thursday at the Global Independence Center, Lockhart posited that the Brexit would not constitute a "Lehman moment" in terms of negative impact on the global economy. He said the impact on the U.S. would likely be small but could "play out over a number of years."
NAFCU Chief Economist and Director of Research Curt Long said Lockhart's comments are not a surprise.
"The Fed has shown an inclination to take a very cautious approach to normalizing rates," Long said. "While it is possible that a rate hike could be forthcoming later in the year, the likelihood of more than one increase in 2016 is very small given so much uncertainty in the economy and financial markets."
However, he told reporters that he could envision "circumstances in which at least one policy move could take place and possibly two," referring to potential interest rate hikes in 2016, according to Reuters.
During his speech Thursday at the Global Independence Center, Lockhart posited that the Brexit would not constitute a "Lehman moment" in terms of negative impact on the global economy. He said the impact on the U.S. would likely be small but could "play out over a number of years."
NAFCU Chief Economist and Director of Research Curt Long said Lockhart's comments are not a surprise.
"The Fed has shown an inclination to take a very cautious approach to normalizing rates," Long said. "While it is possible that a rate hike could be forthcoming later in the year, the likelihood of more than one increase in 2016 is very small given so much uncertainty in the economy and financial markets."
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