New York Fed chief: September rate hike highly likely amid better data

William Dudley, the president of the Reserve Bank of New York, has said the US central bank is highly likely to hike interest rate given the recent strengthening of the economy.

In an interview with the Financial Times, Dudley cited accelerating wage gains, improving incomes, and growing household spending among reasons for the rate hike.

"If we hit 2.5% growth in the second quarter and it looks like the third quarter is shaping up for something similar, then I think you are on a firm enough track that you would imagine you would have made sufficient progress in our two tests [for a rate hike], certainly by the end of the year," he was quoted as saying.

"It would not shock me if we decided to lift off in September, or it wouldn't shock me if the data were a little softer and it caused us to wait."

He added that the economic growth gap between advanced economies is narrowing due to the recovery in Europe and Japan, while Greece remained a "huge wild card".

The US Federal Open Market Committee (FOMC) earlier decided to keep the benchmark interest rate unchanged near zero at its meeting in June. Following the meeting, Fed Chair Janet Yellen said the central bank wants to see further improvement in the labour market before raising the interest rates.

However, most of the members of the committee now forecast a rate hike before the end of 2015.