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MNI INTERVIEW: Ex-Fed's Lockhart Sees No Rush To Cut In 1H

(MNI) WASHINGTON

The Fed will delay rate cuts as long as the U.S. economy and labor market stays solid, former Atlanta Fed president Dennis Lockhart tells MNI.

The Federal Reserve will put off interest rate cuts for as long as U.S. growth and employment stay solid to gather as much evidence on falling inflation as it can -- likely through the first half of the year, former Atlanta Fed President Dennis Lockhart told MNI.

When the U.S. central bank does finally kick off the easing cycle, it would be reasonable to expect a quarter-point move every other meeting and three by year-end to match the FOMC's December projections, Lockhart said in an interview. That would mean investors have overestimated how soon and how quickly cuts will come. Traders are pricing in a first rate cut by May and five by December.

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The Federal Reserve will put off interest rate cuts for as long as U.S. growth and employment stay solid to gather as much evidence on falling inflation as it can -- likely through the first half of the year, former Atlanta Fed President Dennis Lockhart told MNI.

When the U.S. central bank does finally kick off the easing cycle, it would be reasonable to expect a quarter-point move every other meeting and three by year-end to match the FOMC's December projections, Lockhart said in an interview. That would mean investors have overestimated how soon and how quickly cuts will come. Traders are pricing in a first rate cut by May and five by December.

Keep reading...Show less