The Fed’s Bill Dudley is now leaning to the hawkish side. After hinting in August that he was not really in favor of a rate hike in September, the permanent voting member of the Fed now talks about raising the rates later this year.
The US dollar likes it, with EUR/USD slipping under 1.1160 and other currencies also losing ground against the dollar.
William Dudley basically repeats the same stance that Yellen made on Thursday, when she made a detailed case for a hike this year, removing some of the doubts that the Fed will wait forever.
While the President of the New York Fed does see the US economy as doing pretty well, he does see value in pushing the unemployment rate lower. This could be seen as waiting for longer. Financial conditions and international developments are factors in a decision.
Regarding a more exact timing, he also said that October is a live meeting, yet markets expect the Fed to act in December.
His words come on top of a big bulk of US data, which came in mostly as expected, yet with a tick up in the Fed’s favorite inflation measure: the core PCE Price Index, which now stands at 1.3%.
Here is the move higher on USD/JPY which often provides the best reaction to dollar related events:
more coming
