The fallout from the U.S. crackdown on Huawei intensified this week, as trade negotiations between Washington and Beijing reportedly hit a roadblock.Asia Marketsread more
The issue of corporate debt has surfaced as companies continue to use the low rates the Fed has provided to lever up their balance sheets.The Fedread more
The U.S. government on Monday temporarily eased some trade restrictions imposed recently on China's Huawei, a move that sought to minimize disruption for the telecom company's...Technologyread more
Most U.S. hedge funds aren't expecting another big stock market sell-off as more firms curb bets on volatility, according to Nomura.Marketsread more
Mall owners are increasingly building out food halls with local chef-driven eateries, sushi bars and premium coffee shops.Retailread more
While Trump's lawyers had argued that the committee's subpoena did not have a legitimate legislative purpose — and was therefore invalid — Mehta took a broader view.Politicsread more
See which stocks are posting big moves after the bell on Monday, May 20.Market Insiderread more
Binny Bansal, co-founder of Indian e-commerce giant Flipkart, says there are three traits that led to the business landing a record-breaking sale to retail giant Walmart.Entrepreneursread more
Silicon Valley argues that Wall Street focuses too much on near-term profits — but investors have embraced money-losing biotech IPOs.Marketsread more
U.S. President Donald Trump told his supporters in Pennsylvania that his high-stakes trade war with China had strengthened the state's steel industry and jobs.Politicsread more
Iran has quadrupled its output of nuclear material amid rising tension with the U.S. and dangerous escalations in the Middle East.Energyread more
Uncertainties surrounding trade and the federal budget will be the main challenges for Federal Reserve policymakers, outgoing New York Fed President William Dudley said Wednesday.
As he prepares to leave his position in June, Dudley said in a speech that he feels confident that the policymaking Federal Open Market Committee is close to its objective of full employment and price stability.
However, the threat of a trade war and a fiscal situation that is threatening to spin out of control are expected to pose challenges.
"On a personal level, I am pleased that I will be leaving my current position at a time when the FOMC is likely to be very close to its employment and inflation objectives — recognizing, of course, the terrible damage of the financial crisis and the long time it has taken to get here," Dudley said during a speech at Lehman College in the Bronx. "Uncertainty about trade policy and the fact that we are now on an unsustainable fiscal path, however, have raised the longer-term risks."
Dudley indicated that, absent major disruptions from policy, the best bet for the Fed will be to continue with rate increases until it reaches a neutral level that is neither overly stimulative nor restrictive.
He figures that will be around 3 percent, which would point to six more quarter-point hikes before the Fed pauses. That assumes the continuation of current economic conditions, which he called "quite favorable."
However, he said his colleagues will have to monitor the risks now and after he is gone.
"Over time, how U.S. trade policy evolves will have important implications for the performance of the U.S. economy — and, by extension, for U.S. monetary policy," he said. "By increasing uncertainty around the economic outlook, these shifts in fiscal and trade policy could make it more difficult for the FOMC to achieve its dual mandate objectives in the years ahead."
On a related issue, Dudley addressed some internal deliberations over how the Fed should target and carry out its goals. Several schools of thought have emerged, but Dudley recommended the Fed maintain its current policy of using the rate it pays on excess reserves to control the target funds rate that the committee uses as its benchmark.