Dudley Says Fed Needed Financial Tightening to Restrain Economy
- Former New York Fed chief says volatility ‘probably necessary’
- Fed would pause if market sell-off hurts economy, Dudley says
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The recent stock market slump was probably necessary for U.S. policy makers to achieve their goal of restraining the expansion, former Federal Reserve Bank of New York President William Dudley said.
“Their view is, the economy is growing at an above-trend pace, we already have a very tight labor market, we need to slow the economy,” Dudley said in a Bloomberg Television interview Thursday. “Somewhat tighter financial conditions aren’t really a bad thing. They’re probably a necessary thing for the Fed to achieve its objectives.”