Fed could begin reducing bond buys in September: Lockhart ATLANTA (Reuters) - The Federal Reserve could begin reducing its bond-buying stimulus as early as its September meeting despite inflation being below target, Atlanta Fed President Dennis Lockhart said on Tuesday. U.S. economic performance remains too mixed for Federal Reserve policymakers to lay out a detailed path for reducing and eventually halting their asset-purchasing program next month, Lockhart said. But he appeared open to at least a modest pullback in monetary stimulus from its current pace of $85 billion per month. "I wouldn't rule out September," he told reporters after a speech. As I see it, a decision to proceed - whether it is in September, October, or December - ought to be thought of as a cautious first step. U.S. inflation has been running well below the Fed's 2 percent target for some time. But Lockhart said he did not see any signs that disinflation was accelerating, and that the current inflation backdrop could still be consistent with a modest pullback in quantitative easing. Lockhart touted "substantial" progress in the labor market but said weak economic growth gave him reason for pause. U.S. gross domestic product rebounded to an annual rate of 1.7 percent in the second quarter of the year following two lackluster quarters. "Recent data do not present a clear picture," he said. Employment gains have been strong enough to lower the unemployment rate while GDP growth has remained lackluster. U.S. unemployment fell to 7.4 percent in July from 7.6 percent in June. In response to a financial crisis and deep recession, the Fed slashed official interest rates to effectively zero and bought nearly $3 trillion in mortgage and Treasury securities in an effort to keep long-term interest rates low and support economic recovery. One key risk to the economy continues to come from Washington, Lockhart said, citing the possibility of some type of protracted fight over the debt ceiling that shakes consumer and business confidence as it did in 2011. Still, even if fiscal hurdles are overcome and the expansion remains on track, the bar for a further retreat from asset buys will remain fairly high. The rolling outlook from here is what really matters in making future decisions on asset purchases. I will need to get comfortable that the employment progress we've enjoyed is not stalling and that disinflation pressures are not building," Lockhart said. Editing by Chizu Nomiyama