September rate hike less likely in US, says NY Fed chief

NEW YORK

 A U.S. central bank rate hike in September appears less likely than before, the head of the the New York Federal Reserve said Wednesday.

"From my perspective, at this moment, the decision to begin the normalization process at the September FOMC meeting seems less compelling to me than it was a few weeks ago," William Dudley told a conference, referring to the Federal Open Market Committee meeting scheduled for Sept. 16-17.

His remarks came as a slowdown in Chinese economy began to affect the U.S. economic outlook.

Before the recent overseas developments, many analysts expected rates to be raised at that meeting.

"But normalization could become more compelling by the time of the meeting as we get additional information on how the U.S. economy is performing and more information on international and financial market developments, all of which are important in shaping the U.S. economic outlook," Dudley said, leaving the door open to prospects of a hike in September.

Recent steep slides in Chinese shares and Beijing's inability to control the situation raised fears that the world's second largest economy could suffer a more dramatic slowdown.

Following Dudley's remarks, U.S. stocks rebounded from six consecutive days of declines, with the Dow Jones industrial average scoring its biggest single-day gains since 2011.