First, Alanta Fed President Dennis Lockhart commented on the increase in the discount rate: How should today’s announcement be interpreted? I would not interpret this action as a tightening of monetary policy or even a sign that a tightening is imminent. Rather, this action should be viewed as a normalization step. … [T]he public and markets should not misinterpret today’s move. Monetary policy—as evidenced by the fed funds rate target—remains accommodative. This stance is necessary to support a recovery that is in an early stage and, in my view, still fragile . emphasis added See his speech for more explanation and details. And on the economic outlook: I see two competing narratives about how this recovery will play out. Growth in the fourth quarter of 2009 was quite strong and raises hope for a robust recovery.

Read more here – Fed’s Lockhart: The Economic Outlook: A Tale of Two Narratives