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Fed's Lockhart doubts firms can raise prices

Fed's Lockhart doubts firms can raise prices (by Greg Robb)

WASHINGTON (MarketWatch) -- Demand is probably too fragile for firms to be able to pass higher input prices onto customers, said Dennis Lockhart, the president of the Atlanta Fed on Monday. "My sense is there is still concern that demand is fragile and pricing power too limited for most markets to take extensive price increases," Lockhart said. The Fed's most recent Beige Book survey of economic conditions released last week found that some firms had succeeded in raising prices. Lockhart said he would be flexible about the question of whether the Fed should undertake another round of asset purchases, or QE3, after the current round of purchases ends in June. Lockhart said his first instinct is to be "very cautious" about another round of purchases. Lockhart said he was more confident about the economy that he was at the beginning of 2010 but added that uncertainty is rising because of the Middle East.

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Fed's Lockhart doubts firms can raise prices