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NY Fed chief sees 3% growth

New York Federal Reserve Bank President William Dudley

New York Federal Reserve Bank President William Dudley Photo Credit: Bloomberg News

The U.S. economy grew about 3 percent in the January-March period, almost matching the expansion that occurred late last year, New York’s top banker said today.

William Dudley, president of the Federal Reserve Bank of New York, forecast a “near 3 percent” increase in the gross domestic product for the first three month of this year. That comes after a 3.1-percent gain in GDP, the value of all goods and services produced, in the October-December period.

Still, Dudley told business people in Puerto Rico today the economic “recovery is still tenuous” and “far off the mark” of the Fed’s goals of full employment and keeping inflation in check.

“We must not be overly optimistic about the growth outlook,” he told a meeting on exporting in San Juan. “We have experienced several shocks from abroad that could have some impact on the economy’s forward momentum, at least in the short term,” he said, referring to political turmoil in the Middle East and the earthquake in Japan.

However, Dudley added that he does not think the Fed should raise interest rates to combat inflation from rising prices for food and gasoline. His speech came after the U.S. Labor Department reported the unemployment rate fell last month to a two-year low.

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