New York Federal Reserve Bank President William Dudley said on Monday the Fed remains on track for a likely rate hike this year and could reach its inflation target next year, faster than many other policymakers anticipate.
Dudley said the first hike could come as soon as October as policymakers take stock of an improving economy.
“If the economy continues on its trajectory … it’s a pretty strong case for liftoff,” with the Oct. 27 to 28 session “live” for the rate hike debate, Dudley said at an event sponsored by the Wall Street Journal in New York. The Fed also meets Dec. 15 to 16. [FED/DIARY]
The U.S. central bank delayed a hike at its September meeting amid uncertainty about the global economy, a U.S. market selloff and concern that inflation might fall further away from the Fed’s two percent target.
But Dudley said he now feels inflation could reach that target sometime next year, a year or more sooner than the median forecast by Fed policymakers earlier this month.
Dudley said he was confident weak global economic conditions and the strong U.S. dollar would prove to be passing influences and allow the Fed to raise rates soon.