Dudley in the Q&A
- Quite pleased to see market increase view on market's June-July views
- Data will drive what Fed actually does
- If he's convinced his forecast is on track, then June or July hike is reasonable
- Brexit is a variable that could influence Fed
- Sees economy growing above-trend with a tighter labor market
- Expects Q2 to be stronger than Q1, sees growth over 2%
- Q1 slowdown was a little bit of a surprise
- Strong retail sales report supports view that this quarter will be stronger
- Market more comfortable with Chinese FX, concerns could return
- Fed won't lose credibility if data doesn't warrant a hike
- Economy is on track to satisfy most conditions for rate hike
- Becoming more confident inflation will rise back to 2%
- Labor market showing uptick in wage pressures
- The bigger uncertainty is what growth will be
- Fed has been pretty clear lately that there would probably be a rate hike this year
- Core CPI has been 'broadly stable'
- He was surprised the markets weren't pricing in a higher chance of a hike
- Range of views on the FOMC is relatively narrow
Dudley is a big-time dove. He shifted a bit a month ago in a speech but he's significantly more hawkish today.
Dudley ends remarks
