Global stock-market turmoil has reduced the case for raising interest rates in September, New York Federal Reserve President William Dudley said Wednesday, cautioning it's important not to overreact to short-term developments.
"From my perspective, at this moment, the decision to begin the normalization process at the September FOMC meeting seems less compelling to me than it was a few weeks ago," Dudley told a news conference at the New York Fed.
"Normalization could become more compelling by the time of the meeting as we get additional information on how the U.S. economy is performing, and more information on international and financial market developments."
Dudley also said that he hopes that the policy-setting Federal Open Market Committee can raise rates this year. He said that policy makers are concerned with the economic outlook, which financial markets can influence through the wealth effect on U.S. households.
The Fed hasn't lifted interest rates in more than nine years, and is weighing the appropriate timing for its first increase. The FOMC next meets on Sept. 16-17 in Washington.
