Reuters (11/12/13) Jonathan Spicer
Atlanta Federal Reserve President Dennis Lockhart says that U.S. monetary policy should stay “very accommodative” to create jobs despite weak growth, warns that inflation is too low, and says that the government shutdown may diminish the reliability of economic data through December, possibly delaying policy action from the U.S. Federal Reserve in December.
Lockhart’s comments, usually seen as indicative of consensus among senior Fed officials, will bolster expectations that the Fed will continue its asset purchase program into next year. The Fed will stop buying bonds when unemployment hits 6.5%, but may ease its purchasing earlier if data on growth and hiring merits it. The Fed also may offset negative reactions to its taper by reducing the unemployment threshold to 6%.
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