FLORHAM PARK, New Jersey (MNI) – The following is an excerpt from
prepared remarks by New York Federal Reserve Bank President William
Dudley Tuesday:
So what does “substantial improvement in the outlook for the labor
market” mean to me? Note that I will be focusing on the outlook, not
just the current state of labor market conditions. In that context, it
wouldn’t be enough for me just to see the unemployment rate decline a
bit. It would also matter why the unemployment rate is declining and
whether that improvement is likely to be sustained in the future. For
example, higher payroll growth that was not supported by stronger
economic growth, or falling unemployment rates that were due mainly to
declining participation in the labor market, would not likely meet my
test. Therefore, to gauge how substantial the improvement in the outlook
for the labor market is, I will be looking at a range of indicators,
including the unemployment rate, payrolls, the participation rate, the
employment to population ratio and job finding rates, as well as the
growth momentum within the economy.
As we approach year-end, the maturity extension program in which we
are increasing our holdings of long-dated Treasuries will be coming to
an end. I’ll be taking stock on how we are doing with respect to our
employment and inflation goals and whether it will be appropriate to
continue purchasing longer-dated Treasuries when that program concludes.
I think that this will depend on whether we have seen a substantial
improvement in the labor market outlook in the interim and any further
evidence about the costs and benefits of continuing such purchases.
** MNI Washington Bureau: 202-371-2121 **
[TOPICS: M$U$$$,MMUFE$,MGU$$$,MFU$$$]
