Investing.com – Federal Reserve of New York president William Dudley said Thursday that a rate hike at the June meeting was definitely on the table, although he noted that the upcoming U.K. referendum on membership in the European Union (EU) was a risk factor.
Not unlike fellow Richmond Fed president Jeffery Lacker earlier on Thursday, Dudley pointed out in a Q&A following a NY Fed presentation that markets had underestimated the probability of policy tightening.
He indicated that a move in June or July was reasonable, but the decision would depend on how the U.S. economy evolved.
Dudley said that he expected the second quarter to show stronger growth than the first three months of the year with his projection for it to come in above 2%.
He also noted that labor market was continuing to firm and showing an increase in wage pressures.
In this regard, he said he believed that the economy was on track to meet conditions for further tightening.
Nevertheless, he believed that the risk of a Brexit, as a possible vote by the U.K. to leave the EU is known, was something that should be considered by the U.S. central bank when making its decision