Fed's William Dudley: Rate hike could come next month

New York Federal Reserve President William Dudley said Tuesday a September rate hike "is possible."

"I don't think my views have changed very much," Dudley told Fox Business Network. "I think we're looking for growth in the second half of the year that'll be stronger than the first half — so some acceleration in the growth outlook."

He added that the labor market continues to generate reasonable job gains.

"We're edging closer towards the point in time where it'll be appropriate to raise interest rates further," Dudley said. "I think it's possible,"he added, referring to a possible rate hike at the Fed's next policy meeting on Sept. 20-21.

"We have to see how the data falls and where we are in terms of the broad supports for the economy. I think the economy is in OK shape."

When asked about the targeted 2 percent inflation, Dudley said the economy was making progress.

"We're getting closer in the sense that headline inflation is drifting up a little bit," he said, "because the earlier declines from energy prices are dropping out of it year over year calculations."

The markets were lower after Dudley's comments.