New York Federal Reserve President William Dudley said Tuesday the timing for raising interest rates will depend on the strength of the economy going forward, reiterating the Fed’s position that rates will remain low well after the central bank’s bond purchasing program winds down.

Dudley also outlined methods the Fed might use for adjusting and controlling interest rates once the timing is right.

No adjustments will occur until after the bond purchases, known as quantitative easing, are phased out, Dudley stressed. The Fed has been tapering bond purchases by $10 billion each month and if that continues, the program should wind down in the fall.

The Fed has dwindled its bond purchases from $85 billion each month in Treasury bonds and mortgage backed securities to its current level of $45 billion.

Once tapering is complete, and if the economy continues to strengthen, “The focus will shift to the timing of lift-off, the pace of tightening once lift-off occurs and where short-term rates are ultimately headed over the longer-term,” Dudley said in prepared remarks before a gathering of economists.

Much like the gradual pace of tapering bond purchases, Dudley said the pace of raising interest rates will likely be “relatively slow.” But that too could be subject to change, depending on the economic data.

“If the response of financial conditions to tightening is very mild – say similar to how bond and equity markets have responded to the tapering of asset purchases since last December – this might encourage a somewhat faster pace,” he said.

However, if bond yields shot higher like they did a year ago in response to tightening “then a more cautious approach might be warranted.”

Dudley is the vice chair of the policy setting Federal Open Market Committee and his views are generally closely aligned with those of Fed chair Janet Yellen.

Dudley suggested the Fed is considering new methods for implementing monetary policy once a decision is made to raise interest rates. He was necessarily vague, however. “I can’t tell you yet how we will do it, but I am fully confident that we have the necessary tools to control the level of short-term rates and the credit creation process,” he said.

Dudley said the Fed is testing an approach for raising interest rates that would involve overnight reverse repurchase agreements in which the Fed takes in cash in exchange for one-day loans of Treasury bonds. The Fed hopes that the rate used for these overnight loans will help determine the direction of short-term loan across all markets.

“Although the testing process is ongoing, early results suggest that the overnight RRP facility will set a floor under money market rates,” Dudley said.

Dudley repeated the Fed’s position that a weak first quarter in which growth was practically non-existent was caused by severe winter weather throughout much of the country. He said GDP will likely move back to its normal 3% rate and that inflation should tick higher later this year toward the Fed’s 2% target rate.

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