The broad U.S. economy has so far seen limited spillover from the widespread problems in the housing market, but economic performance will weaken in the fourth quarter and likely remain weak through the first half of 2008, Dennis Lockhart, head of the Federal Reserve Bank in Atlanta, said during a speech in Huntsville Wednesday.
Lockhart, who serves as CEO and president of the Federal Reserve Bank, is currently a non-voting member of the interest rate-setting Fed Open Market Committee.Lockhart spoke to the Huntsville Rotary Club at the Von Braun Center said he thinks the economy will slow over the coming quarters and return to growth in later in 2008, but he offered that forecast with a qualifier.
"If I were to use one word to characterize our current economic circumstances, that word would be 'uncertain,'" Lockhart said. "Much of this uncertainty relates to the potential depth, length and impact of the housing downturn and potential flow-back to Main Street from the turbulence we have seen on Wall Street."
Lockhart said his fourth-quarter forecast for U.S. Gross Domestic Product is similar to other commercial forecasts which estimate GDP at around 2 percent. For the third quarter, U.S. GDP grew at an annual rate of 4 percent.
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