The U.S. Federal Reserve's New York President William Dudley said Friday that he sees inflation level to increase in the country, adding that the Fed should continue to make rate hikes.
Dudley said he has been 'surprised by the persistence' of inflation level remaining below the Fed's target of 2 percent, but he argued that inflation will increase.
'Low unemployment, sturdy job gains, and rising wages are lifting personal income ... Thus, consumer spending should continue to advance in coming quarters,' he said in a speech at the Council for Economic Education in New York.
'Even though inflation is currently somewhat below our longer-run objective, I judge that it is still appropriate to continue to remove monetary policy accommodation gradually,' he added.
The Federal Open Market Committee (FOMC) has increased its benchmark interest rate four times since the end of 2015, and two times this year -- in March and June.
Dudley said the rate hikes did not have a negative impact on financial markets.
'Financial conditions have eased, rather than tightened, even as the FOMC has raised its short-term interest rate,' he said.
'The economy remains on a trajectory of slightly above-trend growth at about 2 percent,' he added.
Dudley also argued that the effects of Hurricanes Harvey, Irma and Maria on the U.S. economy would be 'relatively modest.'
'Natural disasters tend to depress economic activity initially, but once the recovery and reconstruction efforts get underway in earnest, such disasters actually serve to lift economic activity,' he said.
The total cost of the three hurricanes are estimated to be around $262 billion, or 1.4 percent of the U.S.' gross domestic product last year, according to data from economic research firm Moody's Analytics.
By Ovunc Kutlu in New York
Anadolu Agency
energy@aa.com.tr