(Reuters) – The risk of a new U.S. recession has risen over the last couple of months, but an outright contraction will most likely be avoided, Atlanta Federal Reserve Bank President Dennis Lockhart said on Monday.
Lockhart said there is plenty the central bank could do if the economydoes deteriorate further, including ramping up asset purchases or shifting their composition.
Recent market volatility, driven in part by concerns of slowing economies both in the United States and Europe, threatens consumer confidence and could put a crimp on spending, Lockhart told a Rotary Club meeting.
“The events of the last several weeks are a reminder that circumstances can quickly arise that may call for additional monetary stimulus,” Lockhart said
Last week, the Fed took the unprecedented step of promising to keep interest rates near zero for at least another two years. Lockhart said that in his view, the pledge hinged on economic conditions, and could be altered as the economic winds shift.
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