Rate hike in September very much a possibility, Fed´s Dudley says
Recent strong economic data Stateside and mounting recoveries in Europe and Japan mean that an increase in official policy rates at September´s Federal Open Market Committee, “will be very much in play”, according to a top US policymaker.
In an interview with the Financial Times, on Friday, the president of the Federal Reserve bank of New York, William Dudley, said: “[data since June have made him] less worried about the labour market piece”.
Nevertheless, it is perfectly possible the Fed would hold off until until December before moving, he added.
To take note of, Dudley is seen by some analysts as being on the cautious side of Fed policy-makers.
With possible implications for US dollar strength going forward, the central banker said policy divergence was to a large extent already priced into markets.
However, Grexit might pose a graver risk for markets than many believe because it would set a huge precedent that euro membership was “reversible”.