“There’s not enough in there to convince people that the Fed is going to suddenly go into an aggressive mode that will allow a number of rate hikes”.
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“We have to wait for the minutes of the meeting to have a better ideas of when they will proceed with the rate hike”.
Dudley’s comments were similar to those of Atlanta Fed President Dennis Lockhart on Tuesday.
Minutes from the United States central bank’s last meeting show policy-makers divided over when the next rate rise should come.
The minutes from that meeting were released Wednesday and while they showed the Fed could be leaning towards raising rates they did not suggest it was in any hurry to do so, analysts said.
A few were even pushing for a July rate hike.
“I don’t think anything in these minutes supports a quicker rate increase and again, I think that they’re data dependent still”, said Chris Gaffney, president of Everbank World Markets in St. Louis.
The optimistic chatter is a shift from the Fed’s messages earlier this year. Dudley, an influential Federal Open Market Committee voter who is seen as closest on the board to Fed Chair Janet Yellen, was seen as having the most significant impact on Treasuries’ moves.
Though some economists say they think the Fed will be ready to raise rates next month, most have said they think the policymakers will take no action before December.
Not all Fed leaders are so optimistic. US stocks came off their lows, with some turning positive.
Investors had raised bets earlier this week for a rate increase this year after two Fed policy makers said the economic stars now appear to be aligning despite weak USA growth in the first half of 2016.
The Fed raised rates in December for the first time in almost a decade, but it has since kept rates unchanged amid financial market volatility, a global growth slowdown and tame USA inflation. But in recent months, turbulence in financial markets and concerns about China and weakening global growth have persuaded the Fed to keep rates on hold.
More recently, the really weak May jobs report wiped out any chance of a rate hike this summer.
Performance Sports Group Ltd (PSG.TO) slumped 14.8 per cent to $2.30 after the sports equipment maker said it was facing an investigation by USA and Canadian securities regulators, two days after it said it was conducting an internal probe into its financials.
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Growth is expected to pick up in the second half of the year, which would further bolster the case for more rate hikes.
