The U.S. Federal Reserve is unlikely to take actions that would "snuff out" the current economic expansion anytime soon because inflation is "simply not a problem," Federal Reserve Bank of New York President William Dudley said Tuesday.

Dudley, in a speech to a gathering of the National Retail Federation in New York, said he is optimistic the current expansion will continue even though it is "long in the tooth" by historical standards.

He said that economic expansions end either because inflation climbs and the Fed responds with much tighter monetary policy or because of a large, unanticipated shock that overwhelms both fiscal and monetary policy makers' abilities to respond with sufficient force.

Shocks are by nature hard to forecast, he said, but in the case of inflation, it does not pose an imminent threat.

"Not only are underlying inflation trends very subdued - for example, the core personal consumption expenditures deflator has risen at only a 1.7 percent annual rate over the past year - but the economy is not growing much above its sustainable long-term pace," Dudley said in his prepared remarks.

While pressures on labor resources are mounting, they are doing so very slowly, Dudley said. He also pointed to the strength of the dollar as another headwind for inflation.

The dollar surged by as much as 6 percent against major trading partner currencies following the election in November of Donald Trump as the next U.S. president. Dudley said a strengthening greenback should hold big price increases for goods and services in check.

"The recent strengthening of the dollar will put downward pressure on import prices and limit the ability of domestic producers to raise their prices," said Dudley, who is a permanent voting member of the Federal Open Market Committee, the Fed's monetary policy setting arm.

The Fed raised its benchmark short-term lending rate in December by a quarter percentage point to a range of 0.50 percent to 0.75 percent and signaled the pace of increases would likely accelerate in 2017.