Fed's Dudley: US economy needs to strengthen further before rates are moved

FXStreet (Łódź) - Speaking at the Bloomberg Markets Summit New York Fed president and FOMC vice-chair William Dudley signaled that there was no rush to move rates in the light of subdued inflation expectations and weak global growth. He suggested that it was necessary to wait for clearer signs of the strengthening of the US economy before taking action.

He signaled however that "rates at zero lower bound is not a comfortable place to be for the Fed," and would like to get off it as soon as possible, especially that it would mean helping savers.

Dudley pointed to the strength of the dollar as a gauge of the state of the US economy and that in case of the currency's further appreciation exports as well as inflation would be dampened, hampering Fed's plans. He assured nevertheless that USD's value was not a policy target.

Furthermore, Dudley remarked that the Fed has currently a different perception of asset bubbles and attaches more importance to identifying them ahead of time in order to be able to combat them effectively.