The Federal Reserve is approaching the moment when it can start raising interest rates and the exact timing will be dictated by incoming economic data, said New York Fed President William C. Dudley.

“Hopefully, we’re going to make progress in terms of our goals” for maximum sustainable employment and inflation of around 2 percent, Dudley told an audience on Wednesday after delivering a speech in Rochester, New York. “And so hopefully, in the near future, we’ll be able to actually begin to raise interest rates. When that is precisely, depends on the data.”

The Fed, which has held rates near zero since December 2008, is considering when to raise them for the first time in more than nine years. The policy-making Federal Open Market Committee next meets on Sept. 16-17 and investors on Wednesday saw a 42 percent chance they would act at that gathering.

Dudley said he’s “not going to tell you when, because I don’t know the answer to that. But clearly we’ve made a lot of progress over the last couple of years, so we’re certainly getting nearer to that point in time.”

A Labor Department report last week showed U.S. employers added 215,000 jobs in July, in line with the 211,000 average monthly gain so far this year. The jobless rate held at 5.3 percent. The August jobs report is due on Sept. 4. Inflation measured by the Fed’s preferred gauge of prices was 0.3 percent in the year through June, and has been under the 2 percent goal for more than three years.

Odds of a September rate move have declined from 54 percent on Friday amid global financial market volatility spurred by the surprise decision of the People’s Bank of China on Tuesday to devalue the yuan.

‘Not Inappropriate’

Dudley said that any weakening in the currency that was in line with slowing Chinese growth was understandable, while withholding judgment on the nation’s policy shift.

If China’s economy has proved weaker than its authorities anticipated, “it’s probably not inappropriate for the currency to adjust in consequence to that weakness,” he said.

Thomas Costerg, senior economist at Standard Chartered Bank in New York, said the Fed isn’t “drawing hasty conclusions at this stage” about the developments in China.