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The case for the Federal Reserve to begin raising short-term interest rates should "firm up" ahead of its December policy meeting as risks to the U.S. economic outlook from China's slowdown and financial-market volatility subside, Federal Reserve Bank of Atlanta President Dennis Lockhart said Thursday.

"I expect to see a subsiding of the risks that appropriately led, in my opinion, to a policy hold in September and October," Mr. Lockhart said in remarks prepared for delivery at a conference in Bern, Switzerland. "I think the case for liftoff will continue to firm up."

The Fed last week signaled that it might raise rates "at its next meeting" in mid-December, and Fed Chairwoman Janet Yellen told U.S. lawmakers on Wednesday that the Dec. 15-16 meeting is a "live possibility" for the Fed's first rate increase in nearly a decade so long as the U.S. economy performs as expected.

Headed into last week's policy meeting, "I felt a successful outcome would be expectations aligning with the view that liftoff at our upcoming December meeting is a possibility, but not a certainty," Mr. Lockhart said. "I am satisfied that was accomplished."

CME Group said Thursday that fed-funds futures suggested a 56% probability of a rate increase at the Fed's December meeting, up from roughly a one-in-three chance before the Fed's Oct. 28 policy statement.

"Earlier this year, I thought economic conditions would evolve in such a way that liftoff could be justified by the time the [rate-setting Federal Open Market] Committee met in September," Mr. Lockhart said. "The economy did more or less evolve in line with the path I expected," but "emerging risks — that is, open questions about spillover effects from the slowdown in Chinese growth and the sudden spike in volatility in global financial markets — called for some delay. For me, it was a close call, but I thought holding off was prudent."

Even so, he said, "I am not concerned that the FOMC is behind the curve. Liftoff remains a close call."

More broadly, Mr. Lockhart said, "it is apparent to me that we are in the midst of transition from an extraordinary period that called for unconventional tools, to a period where we again utilize rule-like benchmarks" to guide U.S. monetary policy.

Write to Ben Leubsdorf at ben.leubsdorf@wsj.com

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(END) Dow Jones Newswires

November 05, 2015 13:55 ET (18:55 GMT)

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