Fed's Dudley: Exceptionally low rates still needed

NEW YORK, April 7 (Reuters) - U.S. interest rates need to remain "exceptionally low" for some time to support a still fragile economy and create more jobs, New York Federal Reserve Bank President William Dudley said on Wednesday.

"We are not getting the job gains we would like to see," Dudley said at a luncheon event sponsored by the Economic Club of New York.

"What that tells us is monetary policy has to remain on an easy setting," he said. The benchmark federal funds rate "needs to remain exceptionally low for an extended period," he added.

Minutes from the Fed's last policy meeting, released on Tuesday, suggested the central bank could leave interest rates at record lows for even longer than investors had expected if the economic outlook worsens or inflation drops.

Dudley also said that inflation remains well-anchored but stressed this could change should inflation expectations start to change. (Reporting by Steven C. Johnson and Edward Krudy; Editing by Leslie Adler)