Fed’s Dudley Backs Gradual Rate Increases


New York Federal Reserve President William Dudley said he favors “gradual rate hikes” and “somewhat less” accommodation over time, though he believes it’s premature to judge how changing fiscal policy could influence hikes for now. Dudley notes that the Fed will adjust its views on rate hikes as the considerable fiscal uncertainty abates, though he views the market reaction as appropriate if things play out the way they expect. Thus recent financial market tightening is not greatly concerning as monetary and fiscal policy realign. He notes the economy is in reasonable shape with wage growth firming and the Fed close to its dual mandate, especially with recent stability in inflation noteworthy.

Further Fedspeak heading into the pre-policy meeting “blackout” period has Chicago’s Charles Evans on the economy and policy at 9:11 a.m. ET followed by a Q&A. Dudley will appear on CNBC at 10:30 a.m. St. Louis head James Bullard speaks on the economy at 2:05 p.m. also followed with a Q&A.