NY Fed chief: ISIS unlikely to destabilize global economy

The global economy is unlikely to be destabilized by Islamic State militants and other terrorist groups, New York's top banker said Friday.

"Clearly it's a very serious situation, and my heart goes out to the French people," William Dudley, president of the Federal Reserve Bank of New York, said referring to the Nov. 13 Paris attacks.

"How that's going to affect the international growth outlook? Hopefully it won't affect it very much, because hopefully we will do a good job and fight back," he said in response to a question from an economist at an event at Hofstra University in Hempstead.

Later, in an interview, Dudley said it was "difficult to evaluate" the economic risk of terrorism.

"I just hope that our intelligence community and our armed forces and our allies do everything in their power to minimize that risk."

Dudley's visit to Hofstra was part of a daylong tour to gauge economic conditions on Long Island. The New York Fed serves New York State, Puerto Rico, the U.S. Virgin Islands, northern New Jersey and Fairfield County in Connecticut.

He held private meetings Friday with business executives, both county executives, lenders and the heads of foundations and charities. He ended his day with a visit to Canon U.S.A.'s headquarters in Melville.

Answering questions from Hofstra business students and professors, Dudley declined to say exactly when the Federal Reserve System's Federal Open Market Committee will begin raising short-term interest rates, which have been near zero percent since 2008. He is vice chairman of the committee, which next meets in mid-December.

Dudley said the committee should "soon" be ready to raise rates if inflation approaches 2 percent and unemployment remains low.

Asked about Long Island's economy, Dudley said positive statistics often mask the pockets of poverty and the struggles of immigrants and minorities to find success here.

"There are differences of opportunity depending on where you live, what school district you are in, how segregated is the community you are in," he told the audience of about 100.

"If you are an immigrant or if you have been in the country for several generations, the opportunity sets are much different," he said.

At Canon, Dudley was shown its vast array of cameras and imaging equipment, including a movie camera developed in the United States, a first for the Japanese-owned company.

Canon U.S.A. chief executive Joe Adachi spoke about the exodus of young people from Long Island. "We would like to keep them. We need them" as potential workers, he said, noting Canon employs 1,700 locally.

Dudley nodded, saying, "I've heard a lot about that issue today."

As he left Canon, Dudley said he found Long Islanders to be "more optimistic about their future" than they were during his last daylong tour, in 2012.