US economy should pick up in Q2, says Fed

The US economy should accelerate in the second quarter to an annual growth rate of 3% or more, but it may not be clear for some time if the pick-up is sustainable, said a Federal Reserve official yesterday.

Federal Reserve Bank of Atlanta president Dennis Lockhart also said he expected the US central bank to have run down its bond-buying programme by its October or December meeting and to start raising interest rates in the second half of next year.

The US economy hardly grew in the first quarter but has gathered pace since. Philadelphia Fed president Charles Plosser said on Thursday he expected full- year growth of 3%.