NEW YORK (REUTERS) - The Federal Reserve will likely raise interest rates later this year if the US economy remains on its current path, New York Fed president William Dudley said on Wednesday (Oct 19), downplaying any market-related risks of tightening policy in December.

"If the economy stays on its current trajectory I think... we'll see an interest rate hike later this year," Mr Dudley said at the Lotos Club.

Mr Dudley, a permanent voter on policy and a close ally of Fed chair Janet Yellen, added that a quarter-point hike later this year "is not that big a deal" and he downplayed any risks related to tightening policy in December when investors are preparing for year-end.