The president of the New York branch of the U.S. Federal Reserve says he backs measured rate hikes if the U.S. economy stays on its current trajectory.
William Dudley also said Monday morning financial conditions have tightened modestly since the Nov. 8 election.
He added the markets expect more fiscal policy and faster rate hikes under a Donald Trump administration, calling investor reaction "appropriate."
Since Trump won the presidential race, stocks, bond yields and the dollar have all risen. Dudley called this a "tightening," but not one that concerns him since it appears to be driven by expectations for more government spending that should boost the economy.
Trump was elected on a vow to increase infrastructure spending, cut taxes, reduce government regulations, and renegotiate or halt international trade agreements.
Dudley's remarks came as many economists predict the Fed will decide to raise interest rates at its Federal Open Market Committee meeting in December. The last rate hike was in December 2015, the first in nearly a decade. Dudley is a permanent voting member of the central bank.
