Tags: federal reserve | dudley | interest rate | economy

Fed's Dudley: September Rate Rise Possible After Better Data

Sunday, 28 June 2015 05:26 PM

The Federal Reserve could begin raising interest rates in September if economic data continue to improve as they have in recent weeks, said William C. Dudley, president of the Federal Reserve Bank of New York.

“If the data continue to evolve in the way they have, I think September is very much in play,” Dudley said in an interview with the Financial Times conducted on Friday and published Sunday.

Since Dudley last spoke publicly on June 5, a number of economic reports have suggested the U.S. consumer is faring better than previously thought.

Employers added 280,000 positions in May, the most in five months. Household spending climbed in May by the most in almost six years, buoyed by gains in incomes.

The U.S. central bank’s policy-setting Federal Open Market Committee voted at its June 16-17 meeting to leave its benchmark federal funds rate unchanged near zero, where it’s been held since 2008.

Forecasts released after the meeting showed 15 of the 17 committee members expected the Fed to begin raising the rate this year. Fed Chair Janet Yellen said in a press conference following the meeting that the Fed would first like to see further improvement in the labor market and have increased confidence in the inflation outlook.

“If we hit 2.5 percent growth in the second quarter and it looks like the third quarter is shaping up for something similar, then I think you are on a firm enough track that you would imagine you would have made sufficient progress in our two tests, certainly by the end of the year,” Dudley told the Financial Times.

Economists surveyed by Bloomberg forecast U.S. second quarter real GDP growth at 2.5 percent, rising to 3.0 percent in the third quarter.

Dudley called the unfolding situation in Greece a “huge wildcard,” saying many may underestimate the risk to financial markets of a potential Greek exit from the euro area.

“My personal view is if this goes badly the market reaction may be bigger than what we realize,” he said.

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The Federal Reserve could begin raising interest rates in September if economic data continue to improve as they have in recent weeks, said William C. Dudley, president of the Federal Reserve Bank of New York."If the data continue to evolve in the way they have, I think...
federal reserve, dudley, interest rate, economy
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2015-26-28
Sunday, 28 June 2015 05:26 PM
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