The market's expectation of a mid-year rate hike sounds "reasonable" despite recent weakness in oil prices, said William Dudley, the president of the New York Fed, on Monday. Overall, falling energy prices are "beneficial" for the U.S. economy, Dudley said, in a speech at Bernard M. Baruch College in New York. The Fed official added that it is important not to "overstate" the risks to U.S. oil and gas industry from lower oil prices, especially if they stabilize around current levels. Dudley also seemed sanguine about the inflation outlook, saying he expects the price level to move up toward the Fed's 2% annual target next year. "This move will not likely happen immediately, however, given the recent weakness in energy prices," he said. Dudley said he "hoped" the Fed could hike rates in 2015, saying it would be something to be "truly excited about." But the Fed must be patient as the negative impact of a premature move "would be difficult to rectify."
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