New York Fed President William Dudley said Thursday that the drop in the stock market to date will not endanger the economic expansion. “So far, I’d say this is small potatoes,” Dudley said in an interview on Bloomberg Television.

“The little decline that we’ve had in the equity market today has virtually no implications for the economic outlook” because it follows a very, very large rise in stocks over the past few years, he said.

If the stock decline were to be much deeper and to be more persistent, it could impact households’ and businesses’ spending behavior and curb growth, the New York Fed President said.

Stocks are on pace for their worst week since 2016. The Dow Jones Industrial Average DJIA, -0.87% was down at one point by well more than 600 points.

Market Pulse:The Dow industrials have lost 2,345 points since peak as stock-market selloff accelerates

Dudley, who has a vote on the Fed’s interest-rate committee, said that three rate hikes of a quarter-point each in 2018 remained “a very reasonable projection.”

“If the economy looks stronger, could that three turn out to be more? Perhaps,” he said. The Fed could go a bit slower if the economy looks softer and inflation stays soft.

But Dudley said he thought a slowdown would be a surprise. “There are so many things now on the side of the economy being stronger than expected that I think [a slowdown] is not that likely,” he said. “We have above-trend growth, we have buoyant financial conditions, we still have an easy monetary policy, and this is all taking place with a very large tax cut that is going to provide additional stimulus.”

Dudley is set to step down from his post at some point this year.

Asked whether he viewed Thursday’s stock decline as a one-day phenomenon, Dudley replied, “I don’t think we know now.”

The market is adjusting to the fact that central bankers around the world “are either starting to remove accommodation or are thinking about starting to remove accommodation, and that is a little different from the environment we were in [for] the prior seven or eight years.”

As bond yields have moved higher, that has put a little more pressure on the equity market, he said.