Speaking on Bloomberg
- Bond yields moving up putting pressure on stocks
- Decline in equity market today no economic implications
- More persistent stock falls could affect spending
- So far stock selloff is small potatoes
- The global economy is doing fine
- "Further gradual hikes" meant more economic confidence
- Addition of "further" in Fed policy statement signaled a little more confidence in the strength of the US economy
- He has more confidence in the durability of the US economic expansion, and that Fed will need to raise rates
- It's premature to say 2018 hikes to be 1-4
- Thinks 3 hikes still seems very reasonable
- Four hikes is possible if economic outlook gains
- US possibly moving to trend of faster wage gains
- Does not put too much weight in one wage report
- To support March rate hike, needs confidence at US economy continues to grow above trend
- Weakening economy could change his rate hike views
- So many things on side of economy being stronger than expected, unlikely there will be reason not to raise rates in March
- Long-term rates are rising partly due to Fed rate outlook
- Surprise in his mind was how low bond yields were
- Gap between fat and markets on rates is pretty small
- The market pricing in Fed tightening is appropriate
- If the economy is too strong could make it harder for Fed to guide economy to a soft landing
- He believes tight labor market will boost inflation
- Higher wages which showed jobless rate unsustainably low
- moving inflation goalpost with her credibility
- Fed leader changed to be evolution not revolution
- US government debt service costs are going to rise a lot
- inflation is still below 2% and the Fed can be patient
The comments from the Fed's Dudley has had a negative impact on stocks. The S&P is running away from the 100 day MA at 2639 level and is down -2.32%. The Nasdaq is down -2.54%. The Dow is down -640 points or -2.54%.
