Balance of risks to US economic outlook 'starting to tilt slightly to the downside' – Fed’s Dudley

Speaking at an event co-hosted by the New York Fed and People's Bank of China, in Hangzhou, China, NY Fed President Dudley noted that balance of risks to the US economy remains slightly to the downside.

Key Quotes:

Balance of risks to his US economic outlook 'starting to tilt slightly to the downside'

Uncertainty to his outlook has increased, downside risks have crept up

Has 'very modestly' marked down 2016 US economic growth outlook

Could downgrade outlook more significantly if financial conditions continue to tighten

Now somewhat less confident about inflation's return to 2-pct goal over medium term

US GDP to grow about 2 pct in 2016

US unemployment rate falling to 4.75 pct, his view of full employment

Drop in inflation expectations cause for concern

Further declines in survey-based measures of inflation expectations would be worrisome

Heightened emerging market volatility not surprising

In most cases emerging markets have the tools, resources to manage current difficulties

Weakness in emerging market economies is one reason Fed rate rises should be gradual

Closely monitoring global economic, financial market developments