Policy alone cannot solve U.S. skills mismatch - Fed's Dudley

Federal Reserve policies can benefit U.S. labor markets but cannot alone solve the so-called skills mismatch between workers and employers, New York Fed President William Dudley said this mid week.

Dudley, in prepared remarks, stressed the need for companies to invest in workforce development to better prepare employees for new technologies on factory floors and other workplaces. He did not comment on the timing of interest rate hikes nor update his economic forecasts.

The Fed has kept interest rates near zero for six and a half years to boost employment and help the economy recover from recession. It could start to raise rates as soon as next month.

"Monetary policy can help labor markets recover by providing incentives for firms to invest and grow (but it) cannot by itself solve skill mismatches that may exist in the economy," Dudley was to tell the Rochester Business Alliance.

"Workers who can build skills and remain nimble can do very well in today's economy, while those who can't are much more likely to fall into lower-paying jobs and get stuck there."