Atlanta Fed President Dennis Lockhart, who is a voting member this year on the Federal Open Market Committee, said Thursday he's "cautious" about further expanding the central bank's balance sheet
He says the transmission mechanism of monetary policy through credit channels is constricted
On the demand side, it's limited because larger business are flush with cash, smaller businesses haven't yet seen much revenue growth and households continue to deleverage
On the supply side, underwriting standards have been tightened, some banks are capital constrained, many banks are reducing sector concentrations and supervision has been intensified
With the economy still "striving to get its legs," however, Lockhart favors a continuation of the current low-rate policy
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