The former president of the New York Federal Reserve said he expects the Fed to raise interest rates at its meeting later this month, but it could be the last such raise for addressing the inflation that has been present in the wake of the COVID-19 pandemic. 

Bill Dudley, who served in his position at the New York Fed for about 10 years, told Bloomberg Wednesday that the Fed should be cheering the Labor Department report that inflation fell from an annual rate of 4 percent in May to 3 percent last month. 

But he said he does not believe the report will stop the Fed from raising interest rates because it has signaled that it will review the “totality” of the data on prices for the past three months when deciding what to do at its July meeting. 

Dudley said the “reality” is that the economy is “doing quite well.” Gross domestic product grew 2 percent in the first quarter.

“So the economy really hasn’t slowed down enough to make the Fed confident that they’re going to see that slack in the labor market that they want,” he said. 

The Fed’s committee that sets interest rates decided to keep the rate steady at 5 percent to 5.25 percent last month, which marked the first time it did not raise rates since January 2022. The committee said at the time that the pause would allow it to assess additional information and the implications of its policies. 

Inflation, which had been spurred on by the recovery from the COVID-19 pandemic and continuing supply chain issues, has consistently fallen over the past year from its high of a 9.1 percent annual rate last June. 

Dudley said the most recent inflation report raises the possibility of July being the last rate hike, which he said is “certainly possible.” 

He said the Fed will take a break from raising rates in the meeting after the one in July, which is scheduled for September, and the next meeting in November is a “long time” away from now. 

“I can imagine by that point that it’s possible they’ll see enough news that makes them confident that they’ve done enough,” Dudley said.