trending Market Intelligence /marketintelligence/en/news-insights/trending/e6mk7kJLix0j2f_v4amUTg2 content esgSubNav
In This List

NY Fed chief backs continued tightening despite little price pressure

Blog

The evolving world of central bank digital currencies

Blog

Insight Weekly: US stock market downturn; Chinese bank earnings; Europe's big tech bills

Blog

Expand Your Perspective Uncover Insights on Key Markets with Differentiated Data

Blog

Insight Weekly: Ukraine war impact on mining; US bank growth slowdown; cloud computing headwinds


NY Fed chief backs continued tightening despite little price pressure

Gradual removal of monetary policy accommodation continues to be appropriate, despite inflation coming in below central bankers’ inflation objective of 2%, the head of the New York Federal Reserve said.

Speaking to the Council for Economic Education in Brooklyn, N.Y., on Oct. 6, William Dudley said he was "surprised by the persistence of the shortfall" of inflation. He noted that if that shortfall were caused by structural factors, rather than transitory occurrences, the economy could likely employ more people without a "troublesome large rise in inflation."

If that were to be the case, Dudley said the "upward trajectory" for raising rates should be "shallow."

Market participants expect one more rate hike, likely in December. Median expectations from Federal Open Market Committee policymakers project three more rate hikes through 2018.

The Fed has also begun the process of reducing its $4.5 trillion balance sheet. Dudley said he expected the tightening effect of that process to be "modest," as the Fed had seen "that the impact on the level of long-term interest rates has been small as expectations have adjusted."