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U.S. Fed's Dudley says would be 'delighted' to raise rates in 2015

[October 07, 2014] (Reuters) - An influential Federal Reserve policymaker said he would be "delighted" to raise interest rates some time next year since it would be a sign of economic success, but for now a "very accommodative monetary policy" is still needed.

New York Fed President William Dudley, speaking on the Marketplace radio show on Monday, repeated his belief that the U.S. central bank could let the economy "run a little hot" to help boost inflation toward a 2 percent goal and, critically, to get long-term unemployed Americans back into the workforce.

"If the economy evolves as most people are hoping over the next year, hopefully we can get to a point where we can raise interest rates in 2015 and I would be delighted if that would be the case," said Dudley, who has a permanent vote on policy and is among the Fed's core of decision-makers, including Chair Janet Yellen.

If the economy was strong enough, "raising interest rates would be a sign of success. It would actually be good news," he said, reinforcing the notion that any policy tightening would depend on continued economic rebound.

Inflation, which has remained below target the last couple of years, should ideally spend "half the time a little bit below (2 percent) and half the time a little bit above it," Dudley said.

Addressing possible congressional hearings into the public release of secretly recorded conversations among New York Fed bank examiners and some officials at Goldman Sachs, Dudley said his branch of the central bank will cooperate because he feels "the facts are on our side."

(Reporting by Jonathan Spicer. Editing by Andre Grenon)


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