New York Fed President William Dudley said while he has been surprised that inflation has remained stubbornly below the central bank’s two percent target even as the economy has grown steadily, that has not changed his basic outlook for the course of the benchmark interest rate.

But in a speech to a group of financial industry professionals, Dudley gave no hint as to whether the next increase would come this year.

Past storms “have shown that the impact on the national economy tends to be modest and transitory,” and in fact can provide “a modest boost” as rebuilding gets underway.

Dudley’s comments on inflation were especially interesting since he broke with recent Fed dogma blaming low inflation largely on one-off, transitory factors.

Instead, he said, “While some of this year’s shortfall can be explained by one-off factors, such as the sharp fall in prices for cellular phone service, its persistence suggests that more fundamental structural changes may also be playing a role.”

He cited changes such as the growth of online retail and improved ability of consumers to compare prices as factors slowing price increases.

But those shifts would be positive for the economy, since it would mean the US could put more people to work “without generating a troublesome large rise in inflation,” Dudley said.

Still, the economy’s “above-trend growth” over time will help push inflation — and eventually wages — higher, which means “it is still appropriate to continue to remove monetary policy accommodation gradually,” he said, repeating the Fed’s stance.

Economists recently have come to view the chances for a third rate hike in December as less likely as inflation has dipped to 1.4 percent even as economic growth jumped to three percent in the second quarter.

Dudley, a member of the Fed’s policy-setting Federal Open Market Committee (FOMC), which next meets September 19-20, is seen as closely reflecting the views of Fed chair Janet Yellen.

Yellen last spoke in public in late August but limited her comments to a defense of tighter banking regulations imposed in the wake of the 2008 global financial crisis.

Her most recent comments on monetary policy were in July, but she will hold a press conference later this month after the FOMC meeting.

The Fed this month is expected to launch a plan to begin to reduce the central bank’s massive bond holdings, which were acquired during the financial crisis, which itself will act as a modest interest rate increase.

Dudley said he expects the balance sheet to shrink by $1-2 trillion from the current $4.5 trillion.