WHEN: Today, Tuesday, August 2nd
WHERE: CNBC's "Closing Bell"
Following are excerpts from the unofficial transcript of a CNBC EXCLUSIVE interview with Dennis Lockhart, Federal Reserve Bank of Atlanta President and CEO, on CNBC's "Closing Bell" (M-F, 3PM-5PM ET) today, Tuesday, August 2nd. Following is a link to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000539912.
All references must be sourced to CNBC.
LOCKHART ON CONSUMER ACTIVITY
Consumer activity remains very strong. What we call real final sales is strong and actually accelerating. And the inventory's aspect is what really made the report look dismal to use your word, or to look not so good, but there's underlying information that is more encouraging.
LOCKHART ON BREXIT RISKS
Overall, near term not a big effect. But there are risks associated with the medium term. And we'll just have to see how those things play out. And they could influence the U.S. economy.
LOCKHART ON RATE HIKE
At this point, I don't rule out a rate increase at the next meeting or later in the year. We just have to wait and see how the data come in. The situation is maybe a little bit ambiguous, but I can imagine conditions in which we could have a rate hike.
LOCKHART ON FISCAL MEASURES
Major fiscal initiatives are no doubt going to have wait for the election to pass and for the new administration. It would be best if monetary policy had a fiscal partner. It would be best if everyone were rowing in the same direction. And so, yes, I would like to see some fiscal measures taken in the next administration that will help the economy overall get it's best possible positioning for growth.
LOCKHART ON POLICY RATE
No, I don't think the Fed has reached its limits. But when we're close to zero, at the policy rate level, close to zero, our options are more limited than if the policy rate is set higher.
LOCKHART ON SELLING BONDS
Selling bonds would be part of a tightening cycle of some kind and I think we'd have to make the judgment that the time was right to begin to tighten a little bit. And so far, we have not made that decision…Taken in isolation, I have to think that selling bonds from the portfolio would put upward pressure on rates.
LOCKHART ON ASSET VALUATIONS
Asset valuations are something we have to continue to monitor and watch. And at the moment, I would say they particularly deserve watching because they are relatively buoyant or relatively high. The second point is it's an important channel through which monetary policy actually is expressed in the economy and encourages people to consume. This morning we got very good consumer numbers. Keeps that domestic demand going. One of the big problems in the world is weak demand. So they are important to having monetary policy work, but at the same time we got to watch valuations.
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