Market turmoil makes September rate hike ‘less compelling’: Fed’s Dudley

26-Aug (Reuters) — An interest rate hike next month seems less appropriate given the threat posed to the U.S. economy by recent global market turmoil, an influential Federal Reserve official said on Wednesday.

In the clearest indication yet that fears of a Chinese economic slowdown could influence U.S. monetary policy, New York Fed President William Dudley said the prospect of a September rate hike “seems less compelling” than it was only weeks ago.

Dudley, a dovish policymaker and close ally of Fed Chair Janet Yellen, however left the door open to raising rates for the first time in nearly a decade when the U.S. central bank holds a policy meeting Sept. 16-17.

The global selloff, brought on by weak Chinese economic data, threatens to crimp global growth and create financial conditions unsuitable for a initial policy tightening in the United States, he said.

“At this moment, the decision to begin the normalization process at the September FOMC meeting seems less compelling to me than it was a few weeks ago,” Dudley told reporters at the New York Fed, of the policy-making Federal Open Market Committee.

…Asked about the possibility of another round of stimulative bond-buying, Dudley said the U.S. central bank is “a long way from” that. He added that the market turmoil “is not a U.S. problem” and was sparked by “developments abroad.”

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PG View: Rest easy everyone, it’s not our problem.

If you’re disinclined to believe such pablum, diversify your investments with some physical gold.