Fed's Lockhart says Mideast unrest a risk to U.S.

Reuters

By Matthew Bigg

ATLANTA (Reuters) - Political unrest in the Middle East and North Africa adds a dose of uncertainty to an already-fragile U.S. economic recovery, Atlanta Federal Reserve President Dennis Lockhart said on Wednesday.

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The U.S. economy is improving steadily but unemployment remains "frustratingly" high and a number of risks remain, suggesting the central bank should complete its $600 billion bond-buying stimulus as planned, Lockhart said.

"It will be wise to play it out through its conclusion mid-year as planned with no reduction," Lockhart told a meeting of business executives.

A recent spike in gasoline prices raises the possibility that inflation expectations will move higher, but that has not yet taken place, Lockhart said.

"Wages continue to be quite subdued, wage growth is quite subdued," he said in response to questions. "You get inflation broadly speaking when you add to the mix the chasing of wages to underlying price movements. That does not exist today."