WASHINGTON, Aug. 10 (Xinhua) -- New York Federal Reserve Bank President William Dudley said on Thursday that U.S. economy is expected to continue moderate growth and the inflation will rise to the Fed's 2 percent target.
"Our outlook anticipate a continued moderate growth trend, with some further strengthening in the labor market and an increase in inflation over the medium term toward our objective of 2 percent," Dudley said in his opening remarks at a press briefing on Thursday.
His remarks suggested that the central bank was on track to gradually tighten the monetary policy. Investors widely expected that the Fed would start to reduce its balance sheet from September and might raise interest rate one more time this year.
U.S. job markets have maintained solid growth since the recovery from the Great Recession, while the economy has grown at a modest rate of around 2 percent and the wage growth has also stuck to a moderate 2.5 percent.
Dudley said that the moderate economic and wage growth reflected in part that productivity growth has been sluggish compared to historical experiences.
U.S. nonfarm business sector labor productivity increased only 0.9 percent during the first quarter of 2017.
With the labor market continuing to tighten, wages would eventually rise higher, said Dudley.
In his remarks, Dudley also stressed the importance to address wage inequality, in which technology changes and globalization played part of the role.