Fed's Lacker upbeat on economic outlook (by Greg Robb)

WASHINGTON (MarketWatch) - The U.S. economy will begin to firm next year and continue from there, said Jeffrey Lacker, the president of the Richmond Fed Bank, on Friday. Lacker said that risks to the U.S. economy from the recession in Europe will likely dissipate next year as the region's leaders work through the necessary adjustments to create a new fiscal regime. "As U.S. labor markets continue to heal, I expect household confidence to slowly firm and bolster consumer spending," Lacker said. The Richmond Fed president has dissented from the policy statements issued by the Fed's interest-rate setting committee this year. He said he objected to the forward guidance stating that economic conditions are likely to warrant a federal funds rate near zero for at least several years. This is "a highly imperfect way to communicate about future policy," Lacker said because it suggests the Fed is not committed to keep inflation at 2%. Lacker also opposed the Fed's third round of bond-buying, or quantitative easing, colloquially known as QE3.