New York Federal Reserve President Dudley, the head of the NY Fed is a permanent voter on the Federal Open Market Committee
- Does not repeat expectation for rate hike this year
- Expects US inflation to rise over time
- Surprisingly low inflation suggests 'structural changes' at play
- Expects 2pct inflation over medium term, rise in wage growth
- Easing financial conditions may warrant somewhat sharper rate hikes
- Expects US. economy to perform 'quite well', further labor market tightening
- Lags in policy effects means acting even while inflation remains below 2 pct goal
- Predicts US. bond portfolio will drop to $2.4 trln to $3.5 trln by early next decade
- Assumes bond runoff begins this year, to exert only 'modest' tightening over time
- Asset valuations not particularly troublesome
- Hurricane Harvey effects to complicate economic assessments, though no major hit to economy
Headlines via Reuters
That bolded line is the key takeaway - Dudley less hawkish than he has been. The Dud is close to Yellen and this comment is probably reflective to which way she is leaning too.
Oh, and if you are feeling in a "let it rip" mode, this one too ... Asset valuations not particularly troublesome.
Yowza ...
Full text is here: The U.S. Economic Outlook and the Implications for Monetary Policy
And, by the way, there will be a Q&A following,
so the Dud fun don't be done
