Good time for Fed to wait and see as economy is running hot: Former Fed president Dennis Lockhart

Summary

Dennis Lockhart, former Atlanta Fed president, tells Power Lunch the U.S. economy is running hot with Q4 GDP tracking 5.3% annualized and full-year growth likely above trend. He says inflation remains above the Fed's 2% target, around 2.7% or higher, and argues the Fed can afford to wait and see before adjusting policy. Lockhart also says the DOJ subpoena into Powell could backfire and prolong the transition to a new Fed chair, though he expects the FOMC to stay focused on its mandate.

• Former Atlanta Fed President Dennis Lockhart says the economy is running hot.
• Atlanta Fed GDPNow shows 5.3% annualized Q4 real growth.
• Lockhart expects better-than-trend full-year growth above 2%, possibly above 3%.
• He says inflation is elevated above 2%, likely 2.7% or more.
• Strong demand lets price setters raise prices and can tighten commodity markets.
• Lockhart says the Fed can wait and see over coming weeks or months.
• DOJ subpoena into Powell could backfire and extend the Fed chair transition.
• Lockhart expects the FOMC to focus on its congressional mandate.