The economic conditions are satisfactory and the financial markets are well-prepared for the Federal Reserve to increase interest rates next week, Atlanta Fed President Dennis Lockhart said Monday.
The economy is on a "solid, moderate path," growing closer to 2 percent than 3 percent, Lockhart said on CNBC's "Squawk Box." Lockhart, a centrist, is a voting member on the Federal Open Market Committee policymaking group.
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Lockhart said he expects "more of a gradual path" of rate increases once the initial hike happens. The fed funds overnight lending rate has been at near zero percent since December 2008 in the wake of the financial crisis.
But that gradual path will be debated by the financial markets every step of the way.
"It is sort of torture in a certain way," Lockhart admitted. "We don't know exactly how the economy is going to evolve. We can't commit ourselves ... in advance to a particular pattern or particular schedule."
In the post-meeting policy statements, the targets for the level of the fed funds rate by FOMC participants is plotted in a chart that has come to be known as the dot plot.
"Watch the dots," Lockhart said. "That's probably the best indicator of what that path will look like." He said a "gradual" path means to him, "not every meeting."
Friday's better-than-expected November jobs report added to the notion the Fed would indeed raise interest rates for the first time in nine years following its two-day gathering next week.
The Atlanta Fed's GDPNow model on Friday increased its forecast to 1.5 percent growth for the fourth quarter of 2015, up slightly from a prediction a few days earlier.
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The strong dollar has weighed on manufacturing, Lockhart said, but he does not expect to see a lot of dollar appreciation. Overall, he said the conditions are "very satisfactory" for a rate hike.
"I'm treating [the dollar] as a risk to my forecast at the moment, not building it into my forecast a great deal of dollar appreciation. We have some assumption, but not significant appreciation," Lockhart said.
He said the markets have already accounted for the European Central Bank stepping up its monetary easing policy as the Fed moves in the other direction.
"I think there has been a fair amount of pricing of this divergence theme already in exchange markets," he said.
Meanwhile, St. Louis Fed President James Bullard, an FOMC voting member next year, is expected to speak the economy on Monday afternoon at an event in Indiana.