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[WASHINGTON] Federal Reserve Bank of Atlanta President Dennis Lockhart said on Wednesday that although first-quarter economic activity slowed, the US central bank should still be ready to raise interest rates from June to September.
"I haven't changed my view on timing," Mr Lockhart told reporters during an Atlanta Fed-sponsored financial markets conference in Stone Mountain, Georgia.
"I continue to believe the factors influencing the first quarter were transitory."
Mr Lockhart, who votes this year on the policy-making Federal Open Market Committee, said June to September remained a "reasonable time frame" to consider when to raise rates for the first time in almost a decade.
The FOMC opened the door to an increase as early as June when it met last month, dropping its pledge to remain "patient" in tightening. It has held the benchmark federal funds rate near zero since December 2008.
US consumer spending and the housing market have undershot analyst expectations and a model used by the Atlanta Fed estimates first quarter growth was 0.22 per cent. The economy grew at a 2.2 per cent annual pace in the fourth quarter.
Mr Lockhart said he still sees significant slack in the economy despite the decline in unemployment to 5.5 per cent in February, its lowest since 2008. He said he believed more people not recorded in official unemployment figures may rejoin the workforce if the economy continues to improve.
"I do think there remains considerable unused resources in our labor markets," he said.
Fed Chair Janet Yellen said last week interest rates will probably be raised in 2015 and made the case for a cautious approach to subsequent increases that will keep borrowing costs low for years to come.
Mr Lockhart also said he supports the idea of raising the US$50 billion asset threshold at which banks can be designated as systemically important - a measure backed by those seeking to reduce the regulatory burden on some firms.
"For banks above that threshold, but clearly not mega- banks, giant banks, more in the category of regional banks, I think the threshold should be raised," he said.
Fed Governor Daniel Tarullo, the Fed's point man on bank regulation, said on March 19 that he remains open to tailoring supervision to limit the regulatory burden on smaller banks.
Mr Dodd-Frank, enacted in response to the 2008 credit crisis, subjects the biggest banks to stiffer regulation by the Fed, including higher capital and liquidity standards, annual stress tests and plans showing how they could be unwound in a bankruptcy. Regional banks have lobbied against being grouped with lenders such as JPMorgan Chase & Co and Goldman Sachs Group Inc, arguing that they don't have the same potential to threaten the global financial system.