The US economy may be slowing, a top Federal Reserve policymaker conceded, as investors have ratcheted back bets on when the US central bank will finally begin to tighten monetary policy. William Dudley, president of the New York Fed, said he was still open to the possibility of an interest rate increase this year and stressed that the US economy was performing “pretty well”. But he highlighted weaker jobs and retail sales rises, and argued that growth was being held back by the dollar’s appreciation and swings in inventories. Interest rate futures now indicate that most traders do not see any rate increases this year, and about half think the central bank may have to wait beyond March next year. Fed Funds futures signal that there is about a 10 per cent chance that policymakers will sit on their hands until 2017. As a result, the 10-year Treasury yield has dipped back to the 2 per cent mark, confounding predictions of a gentle rise this year.