More comments from Dudley in his interview with the WSJ:
- If data were weak, Fed may slow the QE taper pace
- No substantive reason for concern about financial stability
- Leveraged loans and farmland prices are areas of concern for overvaluation
- Reverse repos could be used as a ‘floor’ on rates, Fed should assess
- No strong imperative for Fed to shrink its balance sheet
- Expectations of no rate rise until mid-2015 appropriate
- Costs exceed the benefits of altering IOER
- Fed won’t engineer ‘overshooting’ of inflation goal
Dudley has decided to compete with Draghi for who can talk for the longest.