Forecasts for the Federal Reserve to raise interest rates in mid-2015 are “reasonable” as policy makers wait for unemployment to fall further and inflation to rise, New York Fed President William C. Dudley said.
“It still is premature to begin to raise interest rates,” Dudley said today in a speech in Troy, New York. “The labor market still has too much slack and the inflation rate is too low.”
Dudley said a strengthening dollar, weak foreign demand and strong domestic energy production are all holding down inflation, which remains below the Fed’s 2 percent target. “There still is a significant underutilization of labor market resources,” he said.
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