Federal Reserve Bank of New York President William Dudley said there is still a robust case to support interest-rate increases amid risks the economy could overheat, while warning that the new tax bill could present problems over time.
If the economy continues to make progress on achieving the Fed’s job and inflation goals, “I will continue to advocate for gradually removing monetary policy accommodation,” Mr. Dudley said in the text of a speech to be delivered before a gathering of the Securities Industry and Financial Markets Association in New York.
The argument in favor of rate rises “remains strong,” he said. “While the fact that inflation is below the [Federal Open Market Committee’s] 2% objective argues for patience, I think that is more than offset by an outlook of above-trend growth, driven by accommodative monetary policy and financial conditions, as well as an increasingly expansionary fiscal policy,” Mr. Dudley said.
Source: Dow Jones