Ett par veckor gamla uttalanden från William Dudley

"Federal Reserve Bank of New York President William C. Dudley said faster economic growth is needed to generate the lasting job gains that would prompt him to support a reduction in stimulus.

“The missing ingredient” is that “we haven’t actually seen an acceleration in the growth rate that will actually sustain the improvement in the labor market,” Dudley, 60, said to reporters during a press briefing in New York.

Dudley predicted U.S. economic growth will pick up next year and in 2015, saying he’s “more hopeful” the expansion is strengthening as the drag from fiscal policy wanes. Policy makers have said they will press on with bond purchases, now $85 billion a month, until the outlook for the labor market has “improved substantially.”

The New York Fed chief, who is also vice chairman of the policy-setting Federal Open Market Committee and has supported record stimulus, predicted a 2.5 percent to 3 percent expansion next year, with growth “a little bit stronger” in 2015.

“There’s a lot of uncertainty around that forecast,” Dudley said. “What we actually do will be defined by how the economy actually evolves.”

Inflation will “gradually drift” up toward the Fed’s 2 percent goal, while not reaching that level next year, Dudley predicted. He said he doesn’t think inflation “will be a problem for several years at a minimum.”

The FOMC is debating how to reduce bond purchases without triggering a sharp increase in bond yields. Chairman Ben S. Bernanke said the Fed will probably hold down its target interest rate long after ending so-called quantitative easing, and possibly after unemployment falls below 6.5 percent.

Near Zero

“The target for the federal funds rate is likely to remain near zero for a considerable time after the asset purchases end, perhaps well after” the jobless rate breaches the Fed’s 6.5 percent threshold, Bernanke said in a speech to economists in Washington. A “preponderance of data” will be needed to begin removing accommodation, he said.

Dudley said it’s “important that people get our message broadly right,” and that “the challenge of communication” is a “little more difficult than usual” because policy maker are relying on new tools after cutting the benchmark interest rate almost to zero in December 2008.

Unemployment was 7.3 percent in October. The economy grew last quarter at a 2.8 percent rate. Fed officials forecast a 2 percent to 2.3 percent expansion for 2013, compared with a 1.7 percent estimate released by the Organization for Economic Cooperation and Development."


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