NY Fed Chief Back Pedals on Rate Hike Forecast

The possibility that the Federal Reserve might be forced to delay its long anticipating interest rates hike was planted by a somewhat unlikely source: the vice chairman of the central bank’s Federal Open Market Committee, who was predicting a hike two weeks ago.

In an interview today with CNBC, New York Fed President William C. Dudley cited the concerns of a slowing global economy and its impact on the U.S. economy has potentially creating a new delay in the long-anticipated Fed rate hike.

“I think the key question is, are we going to get sufficient growth in the economy, put downward pressure on the unemployment rate, get an acceleration in wages,” said Dudley. “If we get that, I'll be reasonably confident inflation returning to two percent."

Dudley’s comments appear to signal a route shift: on September 28, he predicted the Fed would “probably” raise rates this year. But in his new interview, he appeared to back pedal on his earlier assertion.

“Based on my forecast, yes I am [expecting a rate hike],” he said. “But it's a forecast, and we're going to get a lot of data between now and December. So it's not a commitment.”