Highlights from FED's Lockhart:

• INFLATION EXPECTATIONS ARE ELEVATED, IS A SERIOUS CONCERN
• Believes that a slowing economy will bring inflation down
• Says that credit environment for broad swath of US borrowers is quite constrained
• Adds that there is a good possibility that the US is in the low growth period
• US may avoid recession on technical basis but economy is weak
• Policy has to remain flexible to deal with whatever event may come