Fed's Dudley Rules Out Explicit Cooperation With Other Central Banks On Rate Hike

New York Fed President William Dudley on Tuesday ruled our "explicit" cooperation with central banks from emerging markets about the precise timing of the U.S. central bank's rate hike. Instead, in a speech prepared for delivery to a policy conference in Zurich, Dudley said the Fed would conduct its policy "transparently and based on clear principles." "We are mindful of the global effects of Fed policy, given the central place of U.S. markets in the global financial system and the dollar's status as the global reserve currency," he said. At the recent International Monetary Fund meeting, there were calls for the Fed to better coordinate its policy to minimize volatility. Dudley said it would be naive to think the Fed's rate hike would not have some impact on global capital flows, foreign exchange valuation and financial asset prices even if the move was widely anticipated. He said the Fed has done a better job in the wake of the 2013 "taper tantrum" and noted that financial markets have heard the Fed's message that rates are likely to be increased some time this year. Dudley said he does not precisely when the move would occur.