Fed's Dudley addresses 'Brexit' and possible summer rate hike

The Federal Reserve is likely to raise interest rates this summer if the economy meets the central bank's expectations, a top official at the central bank said Thursday.

"To reiterate what some of my colleagues have said, June is definitely a live meeting," New York Fed President William Dudley, a voting member of the Federal Open Market Committee, said. "[It] depends on how the economy is going to evolve."

"Looking at the market expectations, it looks like June is roughly one-third of a percent and a tightening through the July meeting looks like about 60 percent in Fed funds futures market," he said. "Clearly looking back a few days ago I think there's a pretty strong sense among FOMC membership that the market was not putting gin a sufficient probability in June or July meeting."

He also said is is "quite pleased" to see the probability of a rate hike rising.

Market expectations for a rate hike spiked Wednesday, after the Fed released the minutes from its April monetary policy meeting

That said, Dudley added British exit from the European Union, or a "Brexit," complicated the central bank's decision to raise rates. The U.K. is slated to vote on the matter June 23, eight days after the Fed's June meeting.

U.S. equities hit session lows following Dudley's remarks and held about 1 percent lower in late-morning trade.

— CNBC's Elizabeth Schulze contributed to this report.