Fed's Lockhart sees "compelling" case for rate hike

Federal Reserve Bank of Atlanta president Dennis Lockhart said the case for raising interest rates this month was “compelling”, although dollar strength was a risk to his outlook.

In a speech in Fort Lauderdale ahead of the Fed’s two-day meeting on 15-16 December, Lockhart said: "I think the economy is closing in on full employment."

"As we approach that condition, I would expect to see confirming evidence that labor markets have tightened up. Such evidence might come in the form of wage growth. The trend in wage growth has been weak for some time, but it may be picking up,” added Lockhart, who is a voting member of the policy-making committee.

However, he added that a further rise in the US dollar was a "risk" to his outlook.

"The dollar has risen pretty substantially since mid-2014," Lockhart said.

On Tuesday, Chicago Federal Reserve president Charles Evans expressed nervousness ahead of the rate decision.

In a speech in East Lansing, he said he would prefer to have more confidence than he currently does that inflation is indeed beginning to head higher before lifting interest rates.