Fed's Lockhart Sees Too Much Economic Pessimism

Johnson City, TN, Sept. 3, 2010--There has been too much negative interpretation of recent economic indicators and the outlook is not as bad as some analysts have suggested, said Dennis Lockhart, the president of the Atlanta Federal Reserve Bank on Friday.

Speaking at East Tennessee State University, Lockhart said he thinks the U.S. economy is experiencing a "temporary downshift" and the economy will look and feel better at the end of the year than it does today.

Lockhart said the Fed's decision last month to buy Treasurys to maintain a stable balance sheet had been "over-interpreted." He said it did not herald the start of new quantitative easing.

He also said the August nonfarm payroll report did not change the picture in the labor market of continued high unemployment. Consumers are holding back from spending because of labor market conditions, he said.