Federal Reserve rate hike possible in September: NY chair

NEW YORK

The Federal Reserve could raise its benchmark interest rate at its September meeting, New York Fed President William Dudley said Tuesday.

"I think it is possible," Dudley said when asked the question in an interview with Fox Business Network.

"We are edging closer towards the point in time when it will be appropriate to raise rates further," he said.

Dudley pointed to an improving job market and said he believes the economy will be better in general in the second half of the year.

The economy added 255,000 jobs in July, according the Labor Department’s latest jobs report. The figure for May was revised to 24,000 from 11,000 and the June figure was revised to 292,000 from 287,000. That brought the last three month's average job gains to 190,000 from 147,000.

There are still a few key indicators in the economy, however, that could force the Fed from raising rates. Inflation is still below the Fed's target of 2 percent, while retail sales and the producer and consumer price indexes for July all fell compared to the previous month.

The Fed, which stressed risks against the economy this year for not imposing a rate hike, said in its July meeting statement that "near-term risks to the economic outlook have diminished." That statement was perceived by some analysts that the central bank could increase rates next month.

Minutes from the July meeting will be revealed Wednesday and are believed to carry clues about the Federal Open Market Committee members' positions on a September rate hike.

The Fed increased its benchmark interest rate by 0.25 points to 0.50 points last December -- the first time in almost a decade.