Fed's Dudley: US Jobs Market Still Justifies Cheap Money

Source: Federal Reserve | Flickr

Federal Reserve Building, Washington, D.C.

The Federal Reserve must remain very accommodative because the labor market remains "far from healthy" despite some recent overall economic improvement, an influential U.S. central bank official said on Monday.

New York Fed President William Dudley, a close ally of Fed Chairman Ben Bernanke, provided a strong defense of the very easy monetary policies that he said were gaining traction.

"We need to keep monetary policy very accommodative," Dudley told The Economic Club of New York. "I see greater cost and risk in moving prematurely to a policy setting that might not prove sufficiently accommodative to ensure a sustainable, strengthening recovery."