Tags: Fed’s Dudley Faster Growth Not Reason to ‘Reverse’ QE2

Fed’s Dudley: Faster Growth Not Reason to ‘Reverse’ QE2

Monday, 28 Feb 2011 09:22 AM

Federal Reserve Bank of New York President William Dudley said the “considerably brighter” economic outlook isn’t yet reason for the central bank to withdraw its record monetary stimulus.

“We provided additional monetary policy stimulus via the asset purchase program in order to help ensure the recovery did regain momentum,” Dudley said in the text of remarks given in New York today. “A stronger recovery with more rapid progress toward our dual mandate objectives is what we have been seeking. This is welcome and not a reason to reverse course.”

Dudley, who is also the vice chairman of the policy-setting Federal Open Market Committee, said the economy is “finally showing more signs of life” because household and finance company balance sheets are improving, monetary and fiscal policy have “provided support” and growth overseas has led to increased demand for U.S. goods and services.

The Fed in November announced a plan to buy $600 billion of Treasurys through June in a second round of so-called quantitative easing aimed at combating too-low inflation, stimulating economic growth and creating jobs.

The U.S. economy needs “sustained strong employment growth in order to be certain that this virtuous circle has become firmly established,” Dudley said.

“We also have to be careful not to be overly optimistic about the growth outlook,” Dudley said. “The coast is not completely clear — the healing process in the aftermath of the crisis takes time and there are still several areas of vulnerability and weakness.”

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Federal Reserve Bank of New York President William Dudley said the considerably brighter economic outlook isn t yet reason for the central bank to withdraw its record monetary stimulus. We provided additional monetary policy stimulus via the asset purchase program in...
Fed’s Dudley Faster Growth Not Reason to ‘Reverse’ QE2
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2011-22-28
Monday, 28 Feb 2011 09:22 AM
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