Although the timing is uncertain, the Federal Reserve’s (FED) first interest-rate increase since 2006 will usher in a “regime shift” that will stir financial markets when it occurs, said New York Fed pres William C. Dudley.  “After more than six years at the zero lower bound, lift-off will signal a regime shift even though policy would only be slightly less accommodative after lift-off than it is before,” Dudley said in Zurich today.  “I expect that this will have implications for global capital flows, foreign exchange valuation and financial asset prices even if it is mostly anticipated when it occurs.”  The FED has said it will raise its benchmark federal funds rate -- which has been near zero since Dec 2008, when it sees further labor-market improvement & is “reasonably confident” inflation will rise back to its 2 percent goal over time.  Many economists predicted the central bank will start tightening in Sep.  Dudley said markets will be able to anticipate rate liftoff by monitoring incoming data, which ought to “help mitigate the degree of market turbulence” when the FED does move. “Nevertheless, I think it would be naïve not to expect some impact.”  He also said “several” important emerging-market economies were vulnerable to higher US interest rates, while adding that they “generally appear to be better equipped today to handle the Fed’s prospective exit from its exceptional policy accommodation than they were during past tightening cycles.”