Federal Reserve Bank of New York President William Dudley said the U.S. economy is gradually recovering and its “momentum” has slowed in recent months.
“The Great Recession has been followed by a tepid recovery,” Dudley, 57, said Tuesday in the text of a speech in Rochester, New York. “Since 2009, economic activity has grown, but not robustly,” he said. “The momentum has slowed.” His remarks were similar to a speech Monday in Ithaca, New York.
Dudley, who is also vice chairman of the policy-setting Federal Open Market Committee, repeated his view that the central bank will probably need to embark on a second round of unconventional stimulus to address too-low inflation and a jobless rate that’s stuck near 10 percent.
The Fed, having reduced interest rates almost to zero and bought $1.7 trillion in securities, is considering a new round of asset purchases as the economy shows signs of flagging, according to the minutes of the FOMC’s Sept. 21 meeting. Policy makers are also weighing efforts to boost public expectations that inflation will rise, the minutes said.
Dudley said on Oct. 1 that more unconventional stimulus is “likely to be warranted” because inflation is too low and unemployment too high, fueling speculation the FOMC will act at its meeting on Nov. 2-3. He reiterated this view on Oct. 19 and again Monday.
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