Dudley in the Q&A after his speech
- Fed is data dependent in terms of policy
- Markets recently reflecting developments abroad
- If financial conditions tighten we take it into account
- Stock market declined quite significantly
- Completely agrees with Yellen's assessment
- Recent events will factor into March FOMC decision
- We've seen some further decline in inflation expectations
- The risk on the inflation side is going to be slower
- The US economy is in quite good shape
- Not spending much time on negative rate discussion
I don't understand why the Fed is so sure that developments abroad are the driver, rather than the blowout in commodities and junk bonds.
If the US does stumble into some kind of recession, there is a good argument to clear out the entire FOMC leadership because comments like these ones certainly don't reflect what markets are saying; and Dudley is supposed to be a dove.
