New York Fed President William Dudley said on Thursday that interest rate hikes are appropriate to reduce the risk of the economy overheating.
Despite the Federal Reserve’s decision to hike rates in March, Dudley argued that the federal funds rate remains “unusually low” amid an uptick in economic growth and a significant reduction in overseas risks.
Dudley struck a similar tone to that of Loretta Mester, President of the Federal Reserve Bank of Cleveland, after she reiterated her view that “further removal of accommodation via increases in the fed funds rate will be needed” should economic conditions “evolve as anticipated”.
Meanwhile, Fed President John Williams, tapered some of his recent bullish rhetoric on the U.S. economy, after he warned even though the economy shows “consistent” and “encouraging” signs, “housing still isn’t quite back”.
The dollar inched higher following Dudley’s comments, as the U.S. dollar index reached a session high of 100.45 by 16:45 EDT.
Gold futures continued to trade in negative territory, down 0.95% to $1,241.80 while Treasury yields added to gains with U.S. 10-Year higher at around 2.422.