Former New York Fed President William Dudley had a message for those who pointed a finger at the central bank for last year’s stock market’s woes: You can’t always blame us
“It was a convenient whipping boy; the Fed’s seeming inflexibility in the space of all these market developments for a while was a convenient whipping boy. The markets occasionally go down for a whole host of reasons.” William Dudley
In an interview Thursday with CNBC at the annual National Association of Business Economics conference in Washington, Dudley, who retired last June, said there were plenty of reasons for Wall Street’s slump late last year that were unrelated to its balance-sheet runoff.
“Look what happened. The balance sheet is still running off, and the stock market has recovered in the first quarter,” he said.
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Despite the Fed’s recent dovish tone, Dudley said the central bank may still make interest-rate moves this year. “I think they decided to, why not just wait for more information. It doesn’t mean they’re done. They just want to see more information.” He added that he does not foresee a U.S. recession on the horizon.
Separately, in a speech Thursday night in New York, Fed Chairman Jerome Powell said “the economy is in a good place,” but pointed to weak holiday-quarter retail sales data, among other things, as “reason for caution,” essentially the same message he gave on Capitol Hill earlier this week.
