Fed’s Dudley Says Tightening Conditions Will Remain

Financial conditions have tightened since the Fed raised interest rates in December, New York Fed president Bill Dudley said on Wednesday, according to a report from news service MNSI.

Dudley also said in an interview with the agency that continued tightening on conditions would weigh on the Fed, MNSI reported.

He also reportedly warned that additional strength of the U.S. dollar could have “significant consequences” for the U.S. economy.

Dudley is president of the Federal Reserve Bank of New York and a voting member on the federal central bank’s policymaking committee.

His comments come as the Fed ponders its next move on monetary policy. The Federal Open Market Committee in December raised its interest rate target a quarter point after seven years of keeping it near zero. It was the first rate hike in more than nine years.

Since then, despite policy that Fed officials insist is accommodative, financial markets have been in revolt. Major stock market averages have fallen considerably, with the S&P 500 down more than 8 percent.

At the January meeting, the FOMC declined to raise rates and made some changes to its post-meeting statement that Wall Street considered significant. One move was the removal of the word “balanced” when describing risks to the Fed’s outlook.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza