NY Fed Dudley Hopes CB Tightens Policy Later This Year

Economic performance will determine when the Federal Reserve finally raises U.S. interest rates from near zero, an influential Fed official said on Monday, adding he hopes to tighten policy later this year.
“We have to see what unfolds,” New York Fed President William Dudley said in a speech that repeated cautious optimism that the U.S. economy will continue to expand and that inflation will begin to firm later this year.

Still, he said, the economy has further to go toward the central bank’s dual goals of full employment and 2-percent inflation.

The data will “hopefully” support a rate hike later this year, Dudley said at the Bloomberg Americas Monetary Summit. But “the timing of normalization remains uncertain because how the economy evolves is also uncertain,” he added.

Dudley, a permanent voter on U.S. monetary policy and a close ally of Fed Chair Janet Yellen, repeated that the pace of tightening will depend on how financial markets react.

The Fed is expected to raise rates by June at the earliest but more likely in the second half of the year, according to forecasts by economists and Fed officials.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza