U.S. Fed officials expect first interest rate hike later this year

Several U.S. Federal Reserve officials said on Monday the first interest rate hike in nearly nine years will likely start sometime later this year, echoing Fed Chairwoman Janet Yellen's remark last week.

William Dudley, president of the Federal Reserve Bank of New York, said in an interview with the Wall Street Journal that if the U.S. economy continues on the same trajectory it's on, there is a pretty strong case for a lift-off before 2015 ends.

Dudley said he was confident that weak global economic conditions and the strong U.S. dollar would prove to be transitory influences and allow the Fed to raise rates soon.

San Francisco Fed President John Williams also said on Monday that it's appropriate to raise interest rates starting sometime later this year, on the expectation that the U.S. economy will reach maximum employment in the near future and inflation will gradually move back to the Fed's 2 percent goal.

Williams expected the economy to grow at a 2.25-percent annual rate in the second half of 2015, which will push the unemployment rate down to below 5 percent later this year. He expected the GDP growth to be a little above 2 percent next year.

He also believed the effects of the rising dollar and the falling oil prices on inflation would prove transitory. As these effects dissipate, and as the economy strengthens further over the next year, he expected inflation to move back to the Fed's goal in the next two years. Endi