It is too early to consider an interest rate rise in the United States due to concerns about global economic growth, New York Federal Reserve Bank President William Dudley was quoted as saying by an Italian newspaper on Monday.
“The situation changed over the last few months,” Dudley told CorrierEconomia last Thursday on the sidelines of a conference at the Brookings Institutions in Washington.
“It’s true we thought we could raise interest rates by the end of 2015, but turbulence on financial markets, modest global growth, energy prices and macro-prudential imbalances are slowing this process down.”
He added that it was “still too early to think about raising interest rates”.
Speaking at the Brookings Institution last Thursday, Dudley said he would be prepared to raise interest rates in December if the U.S. economy performed in line with his forecast of continued moderate growth.
The Fed surprised half of Wall Street in September by holding rates steady rather than hiking. Fed Chair Janet Yellen and other officials have said they expect a rate hike will be needed by the end of this year, but two Fed governors last week urged caution.
Dudley told CorrierEconomia that it would be a “big mistake” to ignore the fact that the global economy is growing only moderately.
The economic insert of Corriere della Sera also quoted Dudley as saying that the Federal Reserve had to look at the global picture but the state of the U.S. economy remained key.
“For me there are some data that have greater importance … for example we need to see a bigger improvement in the U.S. labor market.”
