NEWARK, N.J., April 6 (Reuters) - The timing of interest rate hikes are uncertain and the U.S. Federal Reserve must watch that the surprising recent weakness in the U.S. economy does not foreshadow a more substantial slowdown, an influential Fed official said on Monday.
“The timing of normalization will be data dependent and remains uncertain because the future evolution of the economy cannot be fully anticipated,” New York Fed President William Dudley said in prepared remarks, adding he expects the path of rate hikes to be “relatively shallow.”
He said the weak March jobs report, as well as softer than expected manufacturing and retail sales data in recent months was a surprise. But this likely reflected “temporary factors to a significant degree,” including the harsh winter in much of the United States.
“It will be important to monitor developments to determine whether the softness in the March labor market report evident on Friday foreshadows a more substantial slowing in the labor market than I currently anticipate,” said Dudley, a permanent voter on Fed policy and a close ally of Fed Chair Janet Yellen. (Reporting by Jonathan Spicer; Editing by Chizu Nomiyama)
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