Q&A
- Can improve better micro data, such as information on student loans and structure of the labor market
- Not clear that national data is looking at a portfolio of jobs by workers.
- A lot of work to be done to improve understanding data on interconnection of risks within financial markets
- Hopes for 2% inflation over the long term
- QE overseas is having a ripple effect on US interest rates
- Economy in Japan and Europe is improving.
- Global economy does have a dampening effect on inflation
- Have not had a strong enough economy to put pressure on inflation
- Full employment is 5% according to Dudley. So not a lot of pressure on resources to raise inflation.
The Q&A session is not terribly inspiring as he addresses questions on the regional NJ economy and data topics.
The overall comments, being the first post the employment report, are showing that the according to Dudley at least, the Fed is likely on track for a liftoff, but there remain concerns. He cites temporary factors having an impact on growth (-0.6% weather impact on GDP) and expectations for inflation to move toward the Feds 2% target over time (the inflation expectations did not decline but steadied. So he expects a move higher as labor gets tighter), but the pace of tightening are likely to be more contained. Nothing new.