FOMC President William Dudley reiterated his support of the Federal Open Market Committee's (FOMC) decision to increase interest rates.

NAFCU Chief Economist Curt Long.

"While there are reasons to be cautious about raising interest rates in the face of flagging inflation, at this time the FOMC seems to be in the mood to press forward with rate normalization, "Moreover, a number of the more dovish members will be cycling off the voting contingent of the committee in 2018. Plenty can change between now and then, but based on the present trajectory of the economy, NAFCU's expectation is that the Fed will raise rates again in March."

Federal Reserve Bank of New York President William Dudley yesterday reiterated his support of the Federal Open Market Committee's (FOMC) decision to increase interest rates. Dudley said "above-trend growth" offsets the low inflation that has made some on the committee more cautious toward rate hikes.

Dudley, who also serves as the FOMC's vice chair, made his comments during a speech before the Securities and Financial Markets Association in New York. A day prior, Chicago Federal Reserve Bank President Charles Evans indicated that he would prefer to wait until mid-2018 before going forward with another rate increase. Evans was one of two voters who dissented to the FOMC's decision to raise rates last month.

The FOMC, which is the rate-setting council for the Federal Reserve, voted to raise the federal funds target by a quarter-point during its December meeting to a range of 1.25 to 1.5 percent.

Evans said he disagreed with other committee members' belief that inflation will be boosted by strong economic conditions – he doesn't believe inflation will hit 2 percent until 2019 or 2020. However, Evans stated that the recent tax reform will continue to strengthen economic growth.

Dudley, in his speech, was optimistic about this year's economic growth and unemployment, but he said a too-quick uptick in economic growth could lead the Fed to be more aggressive in its rate setting. 

In 2017, the FOMC raised interest rates three times. Also during the December meeting, the committee revised its projections to three quarter-point rate hikes in 2018 and two or three in 2019.

Dudley is a permanent member of the FOMC; Evans' rotation on the committee ends this year.