Atlanta Federal Reserve Bank President Dennis Lockhart said on Thursday the U.S. recovery has started and he made a plea for central bank independence to assure global markets the U.S. will pursue responsible monetary policies.
Overall, the U.S. economy is improving but still fragile, Lockhart told the World Affairs Council of Jacksonville. Stabilization is proceeding, and the first stages of recovery are under way.
The Atlanta Fed president said the Fed has been able to respond aggressively to the financial crisis without raising inflation expectations because it has a reputation for independence from political influence.
He said that information disclosure requirements for the Fed should not go so far as to open the monetary policy process to short-term political considerations.
I welcome further discussion on ways the Fed can be more accountable and transparent but always within the context of maintaining ... monetary policy independence, he said.
Congress is considering a measure that would expose Fed actions to greater scrutiny.
Lockhart, a voter on the Fed's policy-setting panel, said over the medium term he sees a slow economic recovery as financial markets heal, and the economy adjusts to businesses holding leaner inventories and to more frugal consumers.
Rising defaults and falling property values in commercial real estate pose a risk to the outlook, Lockhart warned.
Inflation should remain contained for some time, he said.
(Reporting by Mark Felsenthal; Editing by Neil Stempleman)