New York Fed's William C. Dudley Discusses Prospects for the US Economy and Monetary Policy
William C. Dudley, president and CEO of the Federal Reserve Bank of New York, shared his outlook for economic activity in the United States, employment and inflation, and described the implications for monetary policy before an audience of approximately 200 NYU Stern students, faculty and alumni in Paulson Auditorium.
In his role, President Dudley serves as vice chairman and a permanent member of the Federal Open Market Committee (FOMC), the group responsible for formulating the nation’s monetary policy.
Detailing his projections for the year ahead and beyond, President Dudley pointed to a rosier economic outlook, citing increases in real personal consumption and improved consumer and business confidence. He also projected that short-term interest rates are likely to remain low for an extended period of time.
He attributed recent economic “seedlings” to three developments:
- Household and financial institute balance sheets continue to improve
- Monetary policy and fiscal policy have supported the recovery
- Growth abroad, and particularly in emerging markets, has led to an increase in demand for US-made goods and services
Keeping a watchful eye on inflation is important for several reasons, argued President Dudley. With this in mind, he described four areas that merit attention:
- How fast and for how long can the economy grow before it’s close to full employment?
- Can inflation rise if economic growth is unusually high, despite “slack” in the economy?
- Will commodity price pressures persist in light of economic growth in China, India and other countries?
- What can the Federal Reserve do to manage inflation expectations?
“Talk is cheap,” said President Dudley, who ensured that the Federal Reserve has the means and the will to tighten monetary policy when needed.
Read President Dudley's full remarks