Dudley Reiterates Fed's Easy-Money Message
The head of the Federal Reserve Bank of New York, repeating comments he made last week, said in a speech Tuesday that the central bank likely will continue to support the recovery for some time, despite market worries that it would pull back soon.
William Dudley reiterated that the Fed's asset purchases could increase from those Chairman Ben Bernanke outlined last month if the labor market and economic growth lagged the central bank's expectations.
On June 19, Bernanke said the central bank expected to reduce the pace of bond-buying later this year and to halt quantitative easing altogether by mid-2014, as long as the economy improves as expected.
The comments set off a wave of selling in global financial markets, with the yield on 10-year Treasury debt rising to near a two-year high last week. Dudley and other Fed officials managed to stem the selling with a series of forceful speeches arguing that investors had overreacted.