NY Fed chief: Rate hike likely this year but hinges on data

AP News
Posted: Oct 09, 2015 1:21 PM
NY Fed chief: Rate hike likely this year but hinges on data

WASHINGTON (AP) — The head of the Federal Reserve Bank of New York said Friday that a Fed rate hike remains likely this year but that a final decision will depend on how the economy performs.

In an interview with CNBC, William Dudley said he expects solid U.S. economic growth to offset weakness overseas, which is hurting U.S. exports. But he said the economy will need to further improve for the Fed to raise rates from record lows.

"There's certainly a risk that the economy evolves in a different way than I expect, and obviously (it would) be totally inappropriate for me to not take that into consideration in terms of what I think is appropriate for monetary policy," Dudley said.

The Fed's final two meetings of 2015 will occur later this month and in December. Though Dudley said a rate hike could theoretically occur at any meeting, his comments seemed to favor December.

Dudley said that while a decision to raise rates at the Oct. 27-28 meeting was "possible," he added: "Have we seen enough information between September and October to convince us to do in October what we didn't do in September? That would be the question I would ask."

Some economists still think the Fed will delay a hike until 2016 because of pressures from overseas and excessively low inflation.