As reported by Reuters, Dudley, who is considered a close ally of fed chair Janet Yellen and has significant weight when making important decisions, said during a conference in Indonesia, the regulator should be very cautious in raising interest rates. According to him, it is too early to fully exclude the tightening of financial policies. However, Dudley has suggested that the negative consequences of this step will be more than positive.
The head of the new York fed indicated that there are a number of factors that constrain interest rate hike by the fed. We are talking in particular about the situation in foreign markets, influencing the American economy. In particular, Dudley highlighted the uncertain prospects for the outcome of the vote for British exit from the EU.
According to Reuters, the statement Dudley suggests that the fed will not raise rates at least until December.
June 21, fed Chairman Yellen told the Senate Committee that she saw “considerable uncertainty” in the economic prospects of the United States. As evidence, she cited the risk of weak figures of reception of citizens to work and soft investment.
On 27 July, the Committee on open market operations (FOMC) of the US Federal reserve left the benchmark interest rate in the range of 0.25–0.5%. Of those who voted for the base rate of the ten FOMC members, only the Chairman of the Federal reserve Bank of Kansas city Esther George voted for its growth of up to 0,5–0,75%.