Federal Reserve Bank of New York President William Dudley said the central bank will stay on its gradual path of raising interest rates unless inflation moves up by “an appreciable margin.”
“I don’t think we know exactly how many more rate hikes we are going to do this year,” Dudley said Monday in an interview with CNBC television. “As long as inflation is relatively low, the Fed is going to be gradual. Now, if inflation were to go above 2 percent by an appreciable margin, then I think the gradual path might have to be altered.”
At their policy session in March, most Fed officials favored either three or four rate hikes in 2018, including the move they executed at that meeting. Dudley said “three or four seemed like a reasonable expectation this year.”
Dudley will retire in June after more than nine years at the helm of the New York Fed. He’ll be succeeded by John Williams, who currently heads the San Francisco Fed.