I'm not sure I believe this headline

The headline from Reuters says Dudley does NOT expect inflation to get back to 2% over the medium term. He evidently said it in comments to reporters.

Him saying inflation won't hit 2% would be a clear signal that they aren't going to hike this year.

It would be an odd comment because in the text of his speech, he said this:

Now, those comments aren't exactly divergent. Technically, they can both be true. He said some other dovish things as well, like that it could take 6-10 months before recent weak inflation numbers drop out of the annual inflation readings.

The thing is, Bloomberg doesn't have that comment and the reporters are all there together. BBG's headline is that it's "going to take some time for inflation to rise to 2%".

"It's really important to distinguish what's happening sequentially," he's quoted as saying.

The flavour of Bloomberg's report -- and it's from a good reporter in Matt Boesler -- is that Dudley is talking about the important differences in trend in the y/y versus m/m numbers. He seems to be indicating that inflation will rise in the m/m numbers but will be held down in the y/y numbers. That makes sense but the terminology is critical because here is the text in the FOMC statement:

"Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee's 2 percent objective over the medium term."