WASHINGTON (Reuters) - Atlanta Federal Reserve Bank President Dennis Lockhart said on Tuesday it was too soon to rule out an interest rate increase at the U.S. central bank's next meeting in September, with a lot of data set to come in on the health of the economy.

"At this point, I don't rule out a rate increase at the next meeting or later in the year," Lockhart said on CNBC. "We just have to wait and see how the data come in."

Lockhart, who does not have a vote on monetary policy this year, said the U.S. economy was faring better than its 1.2 percent annualized rate of growth in the second quarter would suggest, with consumer spending strong and inventories masking the picture.

"The situation is maybe a little bit ambiguous, but I can imagine conditions in which we could have a rate hike," he added. "I'd like to see the economy tell us that it's OK to raise rates."

The Fed has held rates steady since raising them for the first time in nearly a decade in December, and financial markets have curbed bets on any follow-up increase this year amid mixed signals on the U.S. economy and concerns about growth overseas.

Lockhart said Britain's decision to exit the European Union still posed risks over the medium term, even as near-term risks seemed to have faded.

He also expressed concern about what he called relatively lofty valuations in financial markets.

"Asset valuations are something that we have to continue to monitor and watch, and at the moment I would say they particularly deserve watching because they are relatively buoyant or relatively high," Lockhart said.

(Reporting by Timothy Ahmann; Editing by Leslie Adler and James Dalgleish)