• Doing another round of asset purchases is not free
  • Hasn’t seen any data to justify changing Fed’s pledge to keep rates low until late 2014
  • Fed won’t hold down rates to solve fiscal problems, higher rates would significantly raise US debt costs

Good to see Dudley at least acknowledge that whatever the merits of quantitative ease, it does impact inflation psychology.

The first step toward solving a problem is to acknowledge you have a problem…