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Fed's Lockhart makes case to hike rates this year

The Federal Reserve can still hike interest rates this year, according to a key central bank decision-maker.

Atlanta Fed President Dennis Lockhart said in Monday afternoon remarks that 2015 could still see Fed tightening, and that he is "comfortable enough" with inflation to initiate a hike.

"As things settle down, I will be ready for the first policy move on the path to a more normal interest rate environment," he said in prepared remarks. "I am confident the much-used phrase 'later this year' is still operative."

The Federal Open Market Committee, of which Lockhart is a voting member, said in a statement last week that it had opted to leave the key federal funds rate unchanged. Many had speculated that the Fed could have announced its first rate hike since 2006.

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Lockhart said the decision not to move in September was "prudent risk management," but he also said the U.S. economy is "performing solidly" and the country has met the criteria for "further improvement in the labor markets."

Wage pressure, he added, has become more widespread.

Still, he explained that he supported the decision to hold off on a rate hike, and that it was prudent to consider the possible change in economic outlook. But, Lockhart said, market swings—linked to China and other international issues—are not his "central concern."

"As I said, about a month ago, uncertainties loomed larger, market volatility rose and, from a policymaker's perspective, risks to the domestic economy ratcheted up a little," he said. "It's too early to know whether this episode amounts to a bona fide shock to the economy or just a nervous spasm in the markets."

Ultimately, the central banker voiced his support for a hike "in one of the coming FOMC meetings," even if full employment is not totally achieved—a situation which is not required for liftoff, he said.

Despite this, Lockhart said that he was not entirely comfortable about inflation, and that the outlook for prices remains murky into next year.