Former Atlanta Fed President Warns of Rising Financial Risks

Dennis Lockhart sees growing instability in markets and calls for Fed action

Jan. 28, 2026 at 11:39am

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Dennis Lockhart, the former president of the Federal Reserve Bank of Atlanta, appeared on CNBC's "Money Movers" program to discuss his concerns about increasing financial instability risks. Lockhart, who served as Atlanta Fed president from 2007 to 2017, believes the Federal Reserve needs to take action to address these emerging threats to the economy.

Why it matters

Lockhart's comments carry significant weight as he was a key policymaker during the aftermath of the 2008 financial crisis. His warnings about rising financial risks come at a time when the Fed is navigating a delicate balance between controlling inflation and avoiding a recession, making his insights particularly relevant to the current economic climate.

The details

In the interview, Lockhart expressed concerns about vulnerabilities in the financial system, including high levels of corporate debt, stretched asset valuations, and potential risks from the growth of the shadow banking sector. He argued that the Fed should consider taking a more proactive approach to addressing these issues, potentially through measures such as raising interest rates or implementing stricter regulations.

  • Lockhart served as president of the Federal Reserve Bank of Atlanta from 2007 to 2017.

The players

Dennis Lockhart

The former president of the Federal Reserve Bank of Atlanta, who served in that role from 2007 to 2017.

Federal Reserve Bank of Atlanta

One of the 12 regional Federal Reserve banks that, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System.

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What they’re saying

“Financial instability risks are rising, and the Federal Reserve needs to take action to address these emerging threats to the economy.”

— Dennis Lockhart, Former President, Federal Reserve Bank of Atlanta (CNBC)

What’s next

Lockhart's comments are likely to spur further discussion and debate within the Federal Reserve and among policymakers about the appropriate steps to mitigate financial stability risks while also maintaining price stability and supporting economic growth.

The takeaway

As a former senior Federal Reserve official, Lockhart's warnings about rising financial instability risks carry significant weight and underscore the delicate balancing act the central bank faces in its policymaking decisions.