William Dudley - Federal Reserve Bank of New York


Last quote by William Dudley

While we do not yet have evidence of how these reforms will hold up during the next economic downturn, many have been in place long enough that we can begin to evaluate their efficacy.feedback
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Apr 07 2017
William Dudley has most recently been quoted in an article called Bull markets don't mean extra jobs for Wall Street. William Dudley said, “The securities industry is still a pretty important source of very highly paid, very highly skilled jobs, but it's not really contributing to growth in the number of jobs. New York's economy has become more diversified. Wall Street is still an important contributor to the economy, but I wouldn't expect a lot of growth in employment.”. William Dudley has been quoted a grand total of 49 times in 38 articles.
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William Dudley quotes

I think that it will lead to a lot of changes in the value of the dollar, the price of imported goods in the U.S., and I'm not sure that would all happen very smoothly. I also think there could be a lot of unintended consequences.feedback

Assuming the economy stays on this trajectory, I would favor making monetary policy somewhat less accommodative over time by gradually pushing up the level of short-term interest rates.feedback

Still, there is more to do before we can say that we have ended 'too big to fail.' This is work that we absolutely must complete.feedback

I think it would be a big mistake to go back to the pre-financial crisis set of regulations that we had in place. That said, is Dodd-Frank perfect? I would be very hesitant to say that. So if there are aspects of Dodd-Frank that could be improved, it would be completely reasonable for Congress to take that on, and it's obviously up to them.feedback

The crisis occurred in part because there were some real problems in terms of the financial system. Banks didn't have sufficient capital, they didn't have enough quality capital, they didn't have sufficient liquidity buffers.feedback

International developments clearly affect international outcomes and financial stability within each of our borders. These international linkages have become more important over time.feedback

It is challenging for the official sector, market participants, and members of the public to effectively analyze these markets, understand the sources and risks of flash events, and evaluate how liquidity is changing.feedback

If the incentives are wrong and accountability is weak, we will get bad behavior and cultures.feedback

That's quite different than saying there is this urgency to tighten policy aggressively.feedback

I think if the economy continues to evolve along the path we expect, I'd expect we'll be raising interest rates relatively soon.feedback

Inflation is a little below our target, rather than above our target, so I think we can be quite gentle as we go in terms of gradually removing monetary policy accommodation.feedback

A risk management approach to monetary policy would suggest that the more concerned one is with the effectiveness of these policies at the zero lower bound, the more cautious one would be in the process of removing accommodation.feedback

The tide has begun to turn. For the first time in quite a while, we are seeing gains in middle-wage jobs actually outnumber gains in higher- and lower-wage jobs nationwide.feedback

In the past, the city has counted on job growth from Wall Street to fuel economic growth during recoveries and expansions. This time around, however, job gains in the securities industry have been quite meager. Is picking up much of the slack created by the softness of the securities industry.feedback

Thus, when I reiterate that U.S. monetary policy is data dependent, that includes not just the information gleaned from important economic releases such as payroll employment and retail sales, but also how financial market conditions react to economic and financial market developments in the global economy.feedback

The housing bust created a large housing supply overhang and a large number of households that were underwater on their mortgages. Households needed to repair their balance sheets and bring down their debt service burdens to more manageable levels.feedback

If the upcoming information validates my view of the outlook, then U.S. monetary policy will need to move at a faster pace than implied by futures prices to a more neutral posture as the labor market tightens further and U.S. inflation rises". The market didn't appear to be giving much weight to the possibility that the economy could grow faster than expected.feedback

All three of these reasons - evidence that U.S. monetary policy is currently only moderately accommodative, the fact that U.S. financial conditions have been influenced by economic and financial market developments abroad, and risk management considerations - argue, at the moment, for caution in raising U.S. short-term interest rates.feedback

Seeing "evidence of deep-seated cultural and ethical failures at many large financial institutions.feedback

With uncertainties about the outlook and inflation being lower than desired, it allows us to be a little more patient. The so-called Brexit vote is among the "clouds on the horizon" for the U.S. economy.feedback

Clearly looking back a few days ago I think there's a pretty strong sense among FOMC membership that the market was not putting a sufficient probability (on the) June or July meeting.feedback

If I am convinced that my own forecast is sort of on track, then I think a tightening in the summer, the June-July time frame is a reasonable expectation.feedback

June is definitely a live meeting depending on how the data evolves.feedback

We're conducting policy on the basis of imperfect information but that's the information that we have at the time. So it's like you're driving on the road in a storm. You're looking out the windshield, you don't have a perfect view but you have a view and that's the basis for the decisions you make at the time.feedback

Obviously, this is difficult to manage because it's a big, complex economy so I would not be surprised if there were a few bumps...but I think that I'm quite optimistic that this transition can be managed.feedback

If things were to turn in a surprising direction and the outlook in the U.S. were to deteriorate sharply, I think there are a lot of things that we would do long before we would really think about moving to negative interest rates. So to me, that's not really something that should be part of the conversation right now.feedback

The household sector looks much better positioned today than in 2008 to absorb shocks and continue to contribute to the economic expansion.feedback

Given that the labor market still appears to have some excess slack and inflation is below the Federal Reserve's objective, monetary policy is appropriately still quite accommodative despite the advancing age of the expansion.feedback

But its sheer age does not mean that the risk of recession is "edging higher,". Since the possibility is low that a significant inflation risk would emerge over the near term, this means that the main danger facing the current expansion is the risk of large, adverse shocks.feedback

So if those financial conditions were to remain in place by the time we get to the March meeting, we would have to take that into consideration in terms of that monetary policy decision.feedback

It's a touch softer, maybe, than what people were expecting, but I wouldn't put a lot of weight on it in terms of how it would affect my economic outlook.feedback

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