Economics
Fed Will Keep Rates Tighter for Longer Than Expected, Bill Dudley Says
- Ex-New York Fed president sees rate at 4% or more in 2023
- Dudley says it’s premature to worry about overtightening
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The Federal Reserve still needs to get to what can be considered tight monetary policy and will hold rates at a higher level for longer to slow the fastest inflation in almost 40 years, former New York Fed President Bill Dudley said.
The fed funds rate at 2.33% is “well, well below what you would consider to be neutral in this current inflation environment,” Dudley said in an interview on Bloomberg Television on Friday. Policy makers have “made it very clear” that they need to get inflation back to 2%, “so they’re going to be tighter for longer than I think people expect,” he said.