Fed won’t change course in ‘hasty manner,’ NY Fed president says
The Federal Reserve won’t move too quickly should the economy pick up faster than expected, the president of the Federal Reserve Bank of New York said.
While William Dudley, the New York Fed’s president and chief executive, said the 2013 outlook for the U.S. “remains somewhat cloudy,” he said the economy could bounce back more quickly in coming years if the U.S. avoids the so-called fiscal cliff — automatic spending cuts and tax hikes at the end of the year — and if the Eurozone solves its debt crisis.
The Fed has taken aggressive steps to pump money into the economy, most recently with a third round of stimulus called quantitative easing. The central bank has signaled it would keep interest rates low and buy mortgage-backed bonds to ease borrowing costs and spur investment.
“If we were to see some good news on growth I would not expect us to respond in a hasty manner,” Dudley said in prepared remarks for a meeting of the National Assn. for Business Economics in New York. “Only as we became confident that the recovery was securely established would I expect our monetary policy stance to evolve to ensure that it remained appropriate to achievement of our objective: maximum sustainable employment in the context of price stability.”
Dudley also noted the Fed will be monitoring whether its programs create asset bubbles, among other potential consequences. He said fears of inflation because of the programs were “misplaced.”
ALSO:
Daredevil breaks world record with highest jump
Inflation eases in China, providing room for stimulus
