Atlanta Fed President Dennis Lockhart said in an interview with CNBC on Monday that financial markets are prepared for an interest rate hike by the Fed.

He also said that he expects the gradual interest rate hikes once the Fed starts raising its interest rate.

Lockhart noted that diverging monetary policies of the European Central Bank and the Fed priced-in in the foreign exchange market.

Lockhart is a voting member of the Federal Open Market Committee (FOMC) this year.