Hong Kong (MNI) – U.S. growth could disappoint in the first quarter
but the outlook remains better than it was a year ago, New York Federal
Reserve President William Dudley said Tuesday.
He said the recent earthquake in Japan and rising oil prices have
lowered the outlook over the last couple of months but still, “the
outlook for growth is better than it was last summer.”
“It looks like first quarter growth will be somewhat disappointing,
compared with a few months ago, and come in at 3% or a bit less. I think
there is some question about how oil prices will play with consumer
confidence,” he said at a discussion hosted by Institute of Regulation
and Risk North Asia.
And he said it is premature at this point to talk about exiting from
quantitative easing. “We can exit and will exit when time comes but
that doesn’t mean that exit is close at hand.”
Dudley said inflation should peak at 2.5% to 3.0% and so far there
are no signs of second-round inflationary effects.
On the dollar, he said authorities are not concerned about absolute
levels of currencies, but rather their volatility.
“The level is not the issue, the issue is volatility and markets
have been very orderly with the exception of yen after the earthquake,”
he said.
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