New York Fed President William Dudley’s comments to the Japan Society in NYC:

  • Expects to taper QE ‘at some point’
  • Important to see how well economy weathers fiscal drag
  • Fiscal drag to US economy is ‘significant’
  • Expects ‘at some point’ to see enough jobs market improvement to reduce asset purchases
  • Might adjust pace of bond purchases as labor and inflation outlook change ‘in material way’
  • May need to adjust exit strategy

These are dovish comments and the US dollar is, rightfully, selling off. It would be rare for Bernanke to meaningfully depart from something Dudley said so this could only be the stat of a bout of US dollar weakness.