The economy is much closer to maximum employment than many economists think, meaning monetary policy can do little to lower the unemployment rate, said Jeffrey Lacker, the president of the Richmond Federal Reserve Bank, on Monday
Maximum employment is the term for the level of employment that is sustainable over the long-term without acceleration in inflation
The consensus of Fed policymakers puts the full employment rate much lower, between 5.2%-6.0%
But in an interview with Bloomberg Radio, Lacker said "employment is close to maximum right now" given "the constellation of impediments and challenges this economy has had over the years."
Lacker, who voted against additional stimulus at the last Fed policy meeting, said the current slowdown in the economy is not fatal or tipping the economy into recession
"We are just in a situation where growth is going to fluctuate between somewhat satisfactory and disappointing," Lacker said
He added that he now expects the Fed to have to hike rates in late 2013, slightly later than his prior forecast of the middle of that year
