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CNBC Exclusive: CNBC Transcript: Federal Reserve Bank of Atlanta President Dennis Lockhart Speaks with CNBC’s Steve Liesman on “Closing Bell” Today

WHEN: Today, Thursday, May 5th

WHERE: CNBC's "Closing Bell"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Federal Reserve Bank of Atlanta President Dennis Lockhart on CNBC's "Closing Bell" (M-F, 3PM-5PM ET) today, Thursday, May 5th. Following is a link to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000515072.

All references must be sourced to CNBC.

STEVE LIESMAN: I'M HERE AT THE HOOVER INSTITUTION MONETARY POLICY CONFERENCE WITH DENNIS LOCKHART, THE ATLANTA FED PRESIDENT. DENNIS, LET'S START RIGHT OFF WITH GROWTH. THIS WEAK GROWTH WE'VE HAD THE FIRST QUARTER, 0.5% MAYBE TO BE REVISED UP TO 0.7%. HOW OPTIMISTIC ARE YOU THAT WE'RE GOING TO HAVE A REBOUND HERE IN THE SECOND QUARTER? AND WHAT WOULD BE THE BASE OF OPTIMISM?

DENNIS LOCKHART: FIRST, IT'S A LITTLE EARLY TO TELL ABOUT THE SECOND QUARTER. WE'VE GOT A LITTLE BIT OF DATA. THE DATA AREN'T IN ANY WAY SIGNALING CERTAINTY ABOUT HOW THE SECOND QUARTER WILL GO, BUT I'M STICKING TO THE VIEW THAT THE REMAINING THREE QUARTERS OF THE YEAR WILL BE MUCH BETTER THAN THE FIRST QUARTER, AND, THEREFORE, THE FIRST QUARTER IS AN ANOMALY. EITHER IT'S STATISTICAL NOISE OR IT'S JUST SIMILAR TO THE WAY WE'VE SEEN FIRST QUARTERS IN RECENT YEARS. SO I'M OPTIMISTIC FOR THE REMAINDER OF THE YEAR.

LIESMAN: YOU'VE SAID THAT YOU COULD SUPPORT A JUNE RATE HIKE. SO I'LL TAKE THAT IDEA THAT THE POTENTIAL FOR THAT AS A GIVEN. IS THAT WRONG OR – YOU'RE LAUGHING.

LOCKHART: I'M LAUGHING BECAUSE I THINK WE SHOULD KEEP THE OPTION OPEN. BUT I'M VERY MUCH AT THE MOMENT SORT OF ON THE FENCE AND IT WILL DEPEND HOW THE DATA COME IN.

LIESMAN: SO THAT'S WHAT I WANT TO TALK ABOUT IS THE DATA DEPENDENCE HERE. WHAT DOES A SCENARIO LOOK LIKE IN TERMS OF WE GET A JOBS REPORT TOMORROW AND GDP GROWTH AND INFLATION THAT WOULD BE ONE THAT SAID, OKAY, YOU COULD SUPPORT A JUNE RATE HIKE.

LOCKHART: WELL, THE EMPLOYMENT REPORT TOMORROW, I THINK, IS IMPORTANT. WE'LL GET A SECOND ONE BEFORE THE JUNE MEETING. AND CLEARLY, I THINK, IN TERMS OF FOCUSING ON OUR OBJECTIVES, A CONTINUATION OF SOLID EMPLOYMENT REPORTS IS VERY IMPORTANT. I WOULD ALSO BE LOOKING FOR A GROWTH PICTURE THAT SEEMS TO BE MORE CONSISTENT WITH THOSE EMPLOYMENT REPORTS AND, THEREFORE, DATA COMING IN IN THE SECOND QUARTER THAT SUGGESTS THAT WE'RE GOING TO SEE A BOUNCE BACK FROM THE WEAK FIRST QUARTER IF WE TAKE IT AT FACE VALUE. SO THAT THE OVERALL PICTURE IS MORE COHERENT. TODAY WE KIND OF HAVE A DISCONNECT BETWEEN THE GROWTH NUMBERS AND THE EMPLOYMENT NUMBERS. CLEARLY I'D ALSO LIKE TO SEE INFLATION NUMBERS CONTINUE TO MOVE IN THE RIGHT DIRECTION.

LIESMAN: IS 200,000 YOUR BENCHMARK FOR A STRONG JOBS MARKET? OR IF IT CAME IN AT 150 OR EVEN 100,000, WOULD THAT BE OK?

LOCKHART: WELL, 200,000 IS A GOOD ROUND NUMBER. AND I'M NOT GOING TO PANIC IF WE'RE BELOW THAT. AND CERTAINLY I'D BE PLEASED IF WE'RE ABOVE THAT TOMORROW. AND ANY NUMBER THAT COMES IN HAS TO BE TAKEN APART AND DECOMPOSED AND LOOKED AT VERY CAREFULLY TO SEE WHAT THE UNDERLYING STORY IS. BUT, YOU KNOW, FOR PRACTICAL PURPOSES, 200,000 AS A THRESHOLD IS A GOOD WAY TO KIND OF ORGANIZE YOUR THINKING.

LIESMAN: JUNE IS A TRICKY MONTH FOR THE FED BECAUSE SHORTLY BEFORE YOU GUYS MEET, THERE'S THIS BREXIT VOTE. HOW MUCH –

LOCKHART: SHORTLY AFTER WE MEET.

LIESMAN: AFTER YOU MEET, RIGHT, RIGHT. AFTER YOU MEET, THERE'S THE BREXIT VOTE. HOW MUCH INSTABILITY DO YOU THINK THAT COULD CREATE? LET'S SAY, BRITAIN DID LEAVE THE EUROPEAN UNION. WHAT WOULD THAT MEAN FOR U.S. POLICY AND HOW MUCH COULD IT STAY YOUR HAND IN JUNE?

LOCKHART: IT'S A BIG UNKNOWN AND I THINK IT'S POSSIBLE THAT AS THE MARKETS ABSORB INFORMATION RUNNING UP TO THE BREXIT VOTE, THAT THE MARKETS ARE VOLATILE AND CERTAINLY THE BREXIT VOTE RAISES UNCERTAINTY. SOME OF THAT IS SHORT TERM, BUT A LOT OF IT IS PROFOUND LONG-TERM UNCERTAINTY ABOUT THE UK, ABOUT THE EUROPEAN UNION. IT'S A CONSIDERATION. I CAN'T BE MORE DETAILED THAN THAT. I MEAN, I DON'T HAVE EXACTING SCENARIOS OF HOW –

LIESMAN: IF POLLS WERE EVEN GOING IN, WOULD IT BE A BAD TIME TO HIKE RATES IF IT COULD GO EITHER WAY?

LOCKHART: I HESITATE TO KIND OF TAKE A POSITION ON THAT AT THIS STAGE. LET ME JUST SAY, STEVE, IT'S A BIG DEAL. AND THEREFORE, IT'S SOMETHING THAT I THINK AS A POLICY MAKER I HAVE TO PAY REAL CAREFUL ATTENTION TO.

LIESMAN: ANOTHER BIG DEAL IN THIS COUNTRY IS THE PRESIDENTIAL ELECTION. AND ONE OF THE THEMES THAT'S BEEN CONSISTENT IN THE PRESIDENTIAL ELECTION IS A SORT OF ANTI-TRADE THEME AND IT APPEARS TO COME FROM BOTH PARTIES. IS THAT, AS AN ECONOMIC POLICY MAKER, SOMETHING THAT GIVES YOU PAUSE, THAT CREATES UNCERTAINTY FOR THE OUTLOOK FOR YOU, THE IDEA THAT AMERICA MIGHT BE PULLING BACK IN TERMS OF INTERNATIONAL TRADE?

LOCKHART: AS A POLICY MAKER, I'M WATCHING THE ELECTORAL SEASON OBVIOUSLY WITH GREAT INTEREST, BUT NOT NECESSARILY ABLE TO SEE IN ECONOMIC DATA IN ANY PARTICULAR INFLUENCE. BUT INTUITIVELY, I HAVE TO BELIEVE OR AM PREPARED TO BELIEVE THAT THE UNCERTAINTY RELATED TO WHO GETS ELECTED IN NOVEMBER AND WHAT POLICIES ENSUE FROM THAT, THAT CHOICE OF THE PUBLIC COULD BE AFFECTING CONSUMPTION DECISIONS AND MAYBE INVESTMENT DECISIONS OF BUSINESSES, BOTH OF WHICH HAVE BEEN WEAK RECENTLY AND BOTH OF WHICH ARE KEY DETERMINANTS OF DOMESTIC DEMAND AND THEREFORE, HOW OUR ECONOMY IS GOING TO EVOLVE. SO I THINK THE ELECTION, IT'S FAIR TO SAY, COULD BE A FACTOR IN THIS YEAR'S ECONOMY. LONGER TERM, IT REALLY WILL DEPEND ON WHAT THE ELECTED PRESIDENT IS ABLE TO ACTUALLY ACHIEVE AND IMPLEMENT.

LIESMAN: DO YOU THINK A LOT CAN BE ACHIEVED AND IMPLEMENTED? DO YOU THINK IT'S POSSIBLE THAT INTERNATIONAL AGREEMENTS COULD BE CHANGED AND THE IMMIGRATION POLICY COULD CHANGE DRASTICALLY?

LOCKHART: I THINK ONE THING TO CONCLUDE FROM THIS YEAR IS WHATEVER YOUR STARTING ASSUMPTIONS ARE, YOU MAY WANT TO REVISE THEM. I JUST DON'T KNOW. I REALLY DON'T KNOW. PRESIDENTS CERTAINLY CAN HAVE A BIG INFLUENCE, BUT AT THE SAME TIME, A PRESIDENT'S ABILITY TO ACTUALLY SHAPE ECONOMIC OUTCOMES IS NOT AS MUCH AS PERHAPS THE FEDERAL RESERVE OR CONGRESS WITH FISCAL POLICY.

LIESMAN: DENNIS, THANKS FOR JOINING US.

LOCKHART: GOOD TO BE HERE, STEVE. THANK YOU.

LIESMAN: DENNIS LOCKHART, ATLANTA FED PRESIDENT.

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