Federal Reserve Bank of Atlanta President Dennis Lockhart said the central bank’s commitment to a “gradual” tightening suggests interest rates could be raised at every other meeting of the policy-setting Federal Open Market Committee, though the actual pace will depend on incoming economic data.
“Moving up gradually means not every meeting, in all likelihood,” Lockhart said in an interview Monday with WABE, the Atlanta public broadcasting radio station. “The rate of rising interest rates will be more like every other meeting.”
The Fed last week raised rates for the first time since 2006 and said it expected the pace of future tightening to be gradual. Lockhart voted in favor of the statement that announced the quarter percentage point increase in the target range for its benchmark federal funds rate to 0.25% to 0.5%.
Policy makers separately forecast an appropriate rate of 1.375% for the rate at the end of 2016, implying four quarter-point increases in the target range next year, based on the median projection from 17 officials.
The ”important point” is the pace will depend on “how the economy performs,” Lockhart said. “It will be gradually, but data dependent.”