By Jason Lange and Jonathan Spicer
NEW YORK (Reuters) - The Federal Reserve needs more time to assess how global economic weakness and financial market turmoil will hurt the U.S. economy, and it will be patient about policy decisions, a Fed policymaker said on Friday.
In an interview with Reuters, Dallas Fed President Robert Kaplan offered his assessment of the central bank's decision on Wednesday to leave interest rates unchanged and to acknowledge that it was closely watching global financial markets.
Equities and oil prices plunged through most of January as investors worried about a global slowdown and weakness in China in particular. Kaplan said he expected overseas challenges to affect the U.S. economy, and he characterized as "clumsy" China's policy moves over the last six weeks.
He said it was "significant" that the Fed, which aims to keep raising rates this year, decided this week to drop a reference in its policy statement to "balanced" economic risks.
"It should be saying to people (that) we are going to take some time here to understand what is going on," said Kaplan, who took the reins at the Dallas Fed in September.
In an historic decision, the U.S. central bank in December tightened policy by a quarter point for the first time in a decade.
Kaplan, who does not have a vote on rates on the Fed's policy committee this year but takes part in policy deliberations, declined to say how quickly he expects the Fed to lift interest rates this year.
But he said a tightening of global financial conditions, including relatively steeper lending rates for investment grade companies, was getting his attention. He also cited economic weakness in China, Japan and Europe.
"When you put all that together I think there is good reason to be patient (and) take more time to assess the impact on the U.S. economy," Kaplan said.