Comments from Federal Reserve's Dudley
- Risks of moving too slowly vs too quickly are nearly balanced
- Signs inflation expectations under downward pressure
- Domestic demand growth solid, housing improving
- Inflation expectations remain well-anchored
- Oct payrolls strong, hours worked solid
- Declines to comment on whether he favors Dec liftoff
- Fed still falling substantially short of inflation goal
- Economy in decent shape, sees growth a bit above trend
- Need to "think carefully" whether time is right to begin to normalize
- International outlook appears less problematic than a few months ago
- Impact of recent dollar strength likely protracted, trade might continue to be growth drag in 2016
Dudley is a dove and has been slowly become one of the most cautious Federal Reserve members on raising rates. But recent comments from Evans suggest the dovish wing of the Fed is virtually resigned to a Dec hike and will now battle for a slow path of rate hikes.
These comments are a touch more hawkish than I'd expect and that's bullish for the US dollar but there definitely isn't a smoking gun here that makes a rate hike much more likely.
Some are noting that he previously said the Dec meeting is 'live' and that this speech doesn't talk about Dec. The Bloomberg headline says he 'declines' to speak on Dec liftoff and that makes it sound like he was asked and refused. In reality, he just didn't touch on it in his speech.
