UPDATE 1-Fed's Dudley sees risks to U.S. economic outlook tilting to downside
* Downside risks may flag longer pause in next U.S. rate hike
* Still expects U.S. economy to expand around 2 pct this year
* Optimistic China can manage economic transition (Adds comments on the dollar, China's economic transition)
HANGZHOU, China, March 1 (Reuters) - An influential Federal Reserve official on Tuesday said he sees downside risks to his U.S. economic outlook, an assessment that could flag a longer pause before the Fed's next interest-rate hike than he and his colleagues had earlier signaled.
"At this moment, I judge that the balance of risks to my growth and inflation outlooks may be starting to tilt slightly to the downside," New York Federal Reserve President William Dudley said in remarks at a conference in Hangzhou, China sponsored by the People's Bank of China and the New York Fed.
Although he said he still expects the U.S. economy to grow about 2 percent this year, enough to push unemployment down and begin to pull inflation up to the Fed's 2-percent target, he added, "on balance, I am somewhat less confident than I was before."
The Fed raised U.S. interest rates in December for the first time in almost a decade, and signaled that it would probably raise rates four more times this year, a gradual pace by historical standards.
The U.S. central bank in December raised its target range for its benchmark policy rate by one quarter of a percentage point, and currently aims to keep the rate between 0.25 percent and 0.5 percent.
Dudley, a close ally of Fed Chair Janet Yellen and a permanent voter on U.S. monetary policy, suggested that the sharp global economic slowdown, stock-market sell-off and oil price slide since the beginning of the year may force the Fed to tighten monetary policy even more slowly. Continuación...