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His motivation last week to vote in favor of keeping interest rates low was prudent and he’s not overly concerned about downward pressures on U.S. exports, Dennis Lockhart, president and CEO of the Federal Reserve Bank of Atlanta, told the Buckhead Rotary Club Monday luncheon.
A member of the Federal Open Market Committee (FOMC), Mr. Lockhart’s address was mostly upbeat about the domestic economy including developments for transportation, logistics, tourism and lodging, residential construction, commercial real estate and business services.
Saying that “Main Street” mattered more to him than volatile financial markets, nevertheless the volatility and developments abroad had the “possibility but not certainty” of having some impact on the domestic economy, he added.
But he also acknowledged that the dip in Chinese equity share prices and the devaluation of the Chinese currency raised some concerns among the five Federal Reserve governors and 12 Reserve Bank presidents who make up the FOMC.
They weighed the impact of a slowing Chinese economy, he said, as well as declining commodity prices in emerging markets.
He also cited the appreciation of the U.S. dollar and “its assumed downward pressure on U.S. exports as well as inflation.” Also on the list was the decline in oil prices.
Concerning exports, he said that he didn’t think a slowing of China’s economy would have a significant impact on them.
“I don’t think weaker demand from China will greatly reduce our export performance,” he said. “It’s possible there will be indirect impacts, perhaps by way of demand for our exports from emerging markets or Europe.”
Mr. Lockhart indicated that the committee was particularly focused on inflation, which it forecasts to move toward 2 percent next year.
And he had good things to say about Atlanta.
“I consider Atlanta’s economy to be better balanced with a more diversified employment base than before the recession,” he said. “I’m bullish on Atlanta’s economic prospects. Atlanta should grow along with the national economy.”