Atlanta Fed President and CEO Dennis Lockhart spoke Monday afternoon, addressing concerns of unemployment and when the Federal Reserve rate hike will occur. Lockhart reiterated that the economy has made great gains and is approaching an acceptable normal, and policy should shortly acknowledge this reality. As a result, he thinks the time to begin normalizing monetary conditions is close.

From its peak of 10%, the rate of unemployment has fallen to 5.3%. However, the average rate of inflation over the six-plus years of recovery has been 1.5%. Lockhart also noted that consumer spending is almost 14% above its recessionary bottom, and consumer confidence has recently climbed back to near, and by some measures above, pre-crisis levels.

Lockhart summarized the time, post-crisis:

To sum up, the economy has come a long way in the more-than-six-and-a-half years since the federal funds rate hit bottom. The subtext is that the recovery has been slow. It’s taken more than six years of recovery to accomplish what I just described. Clearly, this is a rather long story. The recovery has proceeded at an average annual pace of expansion of only 2.1%.

He continued:

Over this period, the economy has faced a number of headwinds and shocks. We’ve pushed through several domestic fiscal showdowns, including one federal government shutdown, two major winter weather events, geopolitical tensions, and wide swings of global energy prices. Most recently, the Greek and European Union stare-down was unsettling with its potential for a major financial event or worse. These developments slowed activity, shook confidence, and bred cautious economic behavior on the part of American consumers and businesses. These spells of cautious behavior have contributed to a slow pace of recovery.

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Considering the fear that many have regarding the Fed increasing interest rates, Lockheart explained that there is no foreordained date, and the incoming numbers will dictate the timing of the decision. When the committee is comfortable that these two tests have been met, the policy move will come.

Lockhart added more on the policy decisions:

Key to my own thinking on impending policy decisions is the outlook from here. I expect somewhat stronger growth in the second half of the year. I expect the employment markets to continue to tighten. I expect continuing labor market progress to begin to put upward pressure on wages across the economy. And I expect convincing evidence to emerge that inflation is rising to a safer level and approaching our 2% target.

He recapped his speech saying:

Much progress has been achieved since December 2008, when the Fed’s policy rate reached zero, and mid-2009, when the recession ended. That progress has been accomplished with the support of extraordinary monetary policy. Current and prospective economic conditions increasingly do not demand the most aggressive stance of policy. I think the time to begin normalizing monetary conditions is close. Once underway, the process of raising interest rates to more normal, sustainable levels will likely be gradual. It has been a long story, sometimes frustratingly so, but one I am increasingly confident will have a happy ending.

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