Fed’s Dudley pushes policy guidance change at March FOMC: report

Posted by Reuters

Share on Facebook

Tweet on Twitter

(Reuters) – William Dudley, the head of the Federal Reserve Bank of New York, said a policy meeting later this month is a good time for the U.S. central bank to adjust its published guidance on when interest rates would eventually rise, according to a published report.

The Fed, which has held rates near zero since late 2008, has said it would not consider a rate rise until well after the U.S. unemployment rate falls below a threshold of 6.5 percent, as long as inflation remains below 2.5 percent.

A government report earlier on Friday showed the U.S. unemployment rate ticked up to 6.7 percent in February from 6.6 percent in January, still very close to the Fed’s long-standing threshold.

A Fed policy-setting meeting on March 18-19 would be “a reasonable time to revamp (the) statement to take out that 6.5 percent threshold,” Dudley said in an interview with the Wall Street Journal, calling the threshold “obsolete.”

Other policymakers have made similar comments. But as a key decision-maker very close to Fed Chair Janet Yellen, Dudley’s comment is yet the best indication that the Fed will change the policy in March.

(Reporting by Jonathan Spicer; Editing by Chizu Nomiyama)