New York Federal Reserve's president reiterated the U.S. central bank's outlook for growth and inflation during a presentation on regional wage inequality.

"Our outlook anticipates a continued moderate growth trend, with some further strengthening in the labor market and an increase in inflation over the medium term toward our objective of 2%," William Dudley said in prepared remarks Aug. 10.

Policymakers remain concerned about economic growth, Dudley said, noting that annual GDP growth had averaged "just 2.1% since mid-2009," with wage growth "comparatively modest" as unemployment declined to 4.3%.

The Federal Open Market Committee has raised its benchmark federal funds rate twice in 2017 to its current range of between 1.00% and 1.25%. It has also published a plan to reduce the $4.5 trillion in assets on its balance sheet, a move that is expected to exert upward pressure on interest rates.

Market participants expect the Fed to announce at its September meeting that it will begin reducing its balance sheet. The Fed is also expected to raise rates once more this year, possibly in December.