Here are four mistakes the Federal Reserve made, according to former New York Fed President Bill Dudley.
The Federal Reserve made four crucial mistakes that has allowed inflation to soar and will result in more interest rate hikes that markets now expect, said former New York Fed President William Dudley on Monday.
The seeds of the Fed’s woes started in the fall of 2020 when the Fed adopted a new framework to allow inflation to overshoot its 2% target for a time to make up for past periods of low inflation. Dudley’s comments came in an op-ed on Bloomberg News and a subsequent interview. He served as the president of the New York Fed from 2009 until 2018.For months, Fed officials downplayed signs of a tight labor market – instead highlighting that participation in the labor market was lagging.Tight labor markets have now translated into wage growth is now faster than the rate consistent with the Fed’s 2% inflation target, Dudley said.
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