Former New York Fed President: 25 Basis Points Cut is Meaningless, Should Approach Neutral Rate Faster
Publication Time:2024-09-13 19:46:08
William Dudley, who served as the president of the New York Federal Reserve Bank from 2009 to 2018, emphasized that in light of the balanced risks between rising inflation and a weakening labor market, as stated by Federal Reserve officials, the institution should aim to adjust interest rates closer to the neutral level. Given that all Federal Reserve officials believe the current interest rate is below 4%, Dudley pointed out that cutting rates by 25 basis points does not make practical sense. He suggested that logically, the Federal Reserve should take more rapid action. Additionally, last week's employment report showed that since the beginning of the year, the unemployment rate has risen by 0.5 percentage points, which is not reassuring data.
rate cut
Inflation
labor market
New York Fed
25 basis points
Neutral Rate
Dudley