Federal Reserve Bank of Atlanta President Dennis Lockhart said he continues to expect the first interest- rate hike in nearly a decade this year, while cautioning that a stronger dollar, a weaker Chinese yuan and falling oil prices complicate the outlook.

"I expect the normalization of monetary policy —- that is, interest rates —- to begin sometime this year," Lockhart said Monday in Berkeley, California, without citing a particular month. "Currently, developments such as the appreciation of the dollar, the devaluation of the Chinese currency, and the further decline of oil prices are complicating factors in predicting the pace of growth."

Lockhart said on Aug. 10 that he thought the point of liftoff was "close" and told reporters that "from my perspective September remains a live possibility."

Lockhart, who votes this year on monetary policy, has consistently sided with the Federal Open Market Committee majority, led by Chair Janet Yellen. Investors have lowered the probability of a central bank rate increase in September amid continued financial market turmoil and slowing growth in China.

Lockhart said he continues to expect gradual improvement in consumer and investment spending and wages.

The U.S. economy has endured a "number of headwinds and shocks," which have resulted in cautious behavior by consumers and businesses and led to a slow expansion, he said.

"I expect normalization to proceed gradually, the implication being an environment of rather low rates for quite some time," Lockhart said.

Lockhart's comments showed more concern about international developments and falling commodities prices than did St. Louis Fed President James Bullard, who spoke Friday. Bullard said in a radio interview "I would probably be more sanguine than the market" and he repeated his warning that it was risky for rates to stay near zero for too long.

Lockhart spent the bulk of his speech to the 2015 Public Pension Funding Forum, a conference examining pension funding issues, on the topic of the health of public pensions and state and local governments.

Public-sector spending cuts can be a "headwind to overall demand" and affect the success of the Fed's efforts to stimulate growth, Lockhart said.

"To the extent that funding issues with public pensions amplify fiscal stress, the longer-run problem of public funding may translate into growth challenges as the economy seeks to heal from periods of economic weakness," he said.

A former Georgetown University professor, Lockhart has led the Atlanta Fed since 2007. The Atlanta Fed district includes Alabama, Florida, Georgia, and portions of Louisiana, Mississippi and Tennessee.

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