June 15, 2018 / 3:26 PM / 5 months ago

U.S. trade, immigration policies could hit economy-Fed's Dudley

June 15 (Reuters) - U.S. trade and immigration policies could evolve to hurt the economy’s potential, and the Federal Reserve could have to adjust interest rates through 2020 to contend with the government’s “unsustainable” deficit, one of the most influential Fed officials said on his last day on the job Friday.

“I am a little concerned that trade policy could evolve in a way that leads to higher trade barriers, and immigration policy could evolve in a way that leads to much less immigration in the U.S. and therefore less productive capacity for the economy,” New York Fed President William Dudley told reporters.

Interest rates “will probably have to climb a little bit above neutral” because U.S. unemployment, at 3.8 percent, is so low, he added. “The move will be eventually to a slightly tight monetary policy.” (Reporting by Jonathan Spicer Editing by Chizu Nomiyama)

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