Federal Reserve Bank of Atlanta President Dennis Lockhart believes the current stance of monetary policy is a sober response to the reality of economic conditions, both actual and projected. Lockhart says the pace of economic recovery has been inconsistent, with sporadic growth periods, in part because of problems with the transmission mechanism of monetary policy. Lockhart believes banks today are facing challenges, including issues related to the supply and demand of credit. Business and consumer loan demand has been soft, and banks are using tighter underwriting standards. New data show loan demand is beginning to ... (full story)