Fed’s Dudley: Mid-2015 Lift-off Is ‘Reasonable View to Me’
2014-10-07 19:00:00.18 GMT
By Vivien Lou Chen
Oct. 7 (Bloomberg) -- Lift-off in 2015 would be “something
to be very excited about,” would signal economy is healthier,
and “would be very good news even if it were to cause a bump or
two in financial markets,” NY Fed President William Dudley
said.
* Lift-off date will depend on economic data and outlook,
Dudley said in speech in Troy, N.Y.
* Consensus expectation for mid-2015 “seems like a
reasonable view to me”
* Timing could be moved earlier or later depending on
whether economy improves or disappoints
* Timing could be moved earlier or later depending on
whether economy improves or disappoints</li></ul>
* “It still is premature to begin to raise rates,” given
labor market slack and low inflation
* “Significant underutilization of labor market
resources” remains
* “Significant underutilization of labor market
resources” remains</li></ul>
* Forecasts for U.S. growth of ~3% in 2H and 2015 “seem quite
reasonable to me”
* Some headwinds have subsided; fiscal restraint is likely
to disappear next yr, while credit availability has
improved
* Some headwinds have subsided; fiscal restraint is likely
to disappear next yr, while credit availability has
improved</li></ul>
* “Some meaningful chance” that growth will be weaker or
stronger than forecast; “likelihood that growth will be
substantially stronger” than forecast “is probably
relatively low”
* Consumer spending isn’t as strong as one might expect,
households also have higher-than-normal levels of saving
* Stimulus from consumer durable goods cycle is likely to
weaken going forward, sales of light vehicles unlikely
to keep growing at rate of past few yrs
* Stimulus from consumer durable goods cycle is likely to
weaken going forward, sales of light vehicles unlikely
to keep growing at rate of past few yrs</li></ul>
* Stronger USD, due partly to increasing confidence in U.S.
growth prospects, limits upside risk to forecast
* Housing also has less upside risks than might be expected;
“nothing on the horizon” that would soon change low levels
of starts, mortgage constraints
* “Great deal of uncertainty” around future path of
unemployment
* Fed will monitor participation rate; rate “could” rise
again, yet less confident than before
* Fed will monitor participation rate; rate “could” rise
again, yet less confident than before</li></ul>
* CBO’s forecast for core PCE deflator rising to 1.9% by 4Q
2015 from 1.5% in 2Q of this yr is “quite reasonable”
* Risk is that inflation increases more slowly than
forecast; appreciating USD, weaker foreign growth
prospects could act to damp inflation pressure
* “Quite confident” expectations will remain well
anchored
* “Quite confident” expectations will remain well
anchored</li></ul>
* NOTE: Dudley is only Fed president with permanent vote on
policy, has never dissented on FOMC decision
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Vivien Lou Chen in San Francisco at +1-415-617-7078 or
vchen1@bloomberg.net
To contact the editors responsible for this story:
James Holloway at +1-212-617-4454 or
jholloway8@bloomberg.net
Greg Chang
2014-10-07 19:00:00.18 GMT
By Vivien Lou Chen
Oct. 7 (Bloomberg) -- Lift-off in 2015 would be “something
to be very excited about,” would signal economy is healthier,
and “would be very good news even if it were to cause a bump or
two in financial markets,” NY Fed President William Dudley
said.
* Lift-off date will depend on economic data and outlook,
Dudley said in speech in Troy, N.Y.
* Consensus expectation for mid-2015 “seems like a
reasonable view to me”
* Timing could be moved earlier or later depending on
whether economy improves or disappoints
* Timing could be moved earlier or later depending on
whether economy improves or disappoints</li></ul>
* “It still is premature to begin to raise rates,” given
labor market slack and low inflation
* “Significant underutilization of labor market
resources” remains
* “Significant underutilization of labor market
resources” remains</li></ul>
* Forecasts for U.S. growth of ~3% in 2H and 2015 “seem quite
reasonable to me”
* Some headwinds have subsided; fiscal restraint is likely
to disappear next yr, while credit availability has
improved
* Some headwinds have subsided; fiscal restraint is likely
to disappear next yr, while credit availability has
improved</li></ul>
* “Some meaningful chance” that growth will be weaker or
stronger than forecast; “likelihood that growth will be
substantially stronger” than forecast “is probably
relatively low”
* Consumer spending isn’t as strong as one might expect,
households also have higher-than-normal levels of saving
* Stimulus from consumer durable goods cycle is likely to
weaken going forward, sales of light vehicles unlikely
to keep growing at rate of past few yrs
* Stimulus from consumer durable goods cycle is likely to
weaken going forward, sales of light vehicles unlikely
to keep growing at rate of past few yrs</li></ul>
* Stronger USD, due partly to increasing confidence in U.S.
growth prospects, limits upside risk to forecast
* Housing also has less upside risks than might be expected;
“nothing on the horizon” that would soon change low levels
of starts, mortgage constraints
* “Great deal of uncertainty” around future path of
unemployment
* Fed will monitor participation rate; rate “could” rise
again, yet less confident than before
* Fed will monitor participation rate; rate “could” rise
again, yet less confident than before</li></ul>
* CBO’s forecast for core PCE deflator rising to 1.9% by 4Q
2015 from 1.5% in 2Q of this yr is “quite reasonable”
* Risk is that inflation increases more slowly than
forecast; appreciating USD, weaker foreign growth
prospects could act to damp inflation pressure
* “Quite confident” expectations will remain well
anchored
* “Quite confident” expectations will remain well
anchored</li></ul>
* NOTE: Dudley is only Fed president with permanent vote on
policy, has never dissented on FOMC decision
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Vivien Lou Chen in San Francisco at +1-415-617-7078 or
vchen1@bloomberg.net
To contact the editors responsible for this story:
James Holloway at +1-212-617-4454 or
jholloway8@bloomberg.net
Greg Chang