-William Dudley, New York Federal Reserve President
The timing of the first US interest rate hike in a decade continues to depend on economic performance, according to New York Federal Reserve President William Dudley. In comments, Dudley repeated cautious optimism that the world's biggest economy will continue to grow and that inflation will begin to firm later this year. While the US economy has further to reach the Fed's dual mandate of full employment and 2% inflation, the data will "hopefully" support a rate hike later this year, Dudley said. The Fed is expected to raise rates by June at the earliest but more likely in the second half of the year, according to forecasts by economists and Fed officials.
Meanwhile, US consumer sentiment rose more than expected in April to the second-highest level in more than eight years as Americans were more optimistic about the economic outlook and inflation. The University of Michigan said that its preliminary index of sentiment rose to 95.9 this month from 93 in March. The survey's sub-index on business conditions climbed to 108.2 from 105.0 in March, reaching the second-highest level since January 2007, while a reading on consumer expectations rose to 88.0, up from 85.3. Americans expected an inflation rate of 2.5% in the next year, the lowest level since September 2010, and down from 3% in the previous month.
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