The Recovery and Monetary Policy (including Mortgage Market Impairment)

The Recovery and Monetary Policy William C. Dudley, President and Chief Executive Officer

Remarks at the National Association for Business Economics Annual Meeting, New York City
NY Fed, October 15, 2012



As prepared for delivery

Good morning. It is a pleasure to have the opportunity to speak at this NABE (National Association for Business Economics) conference today. Having spent more than 20 years as a business economist working in the private sector before joining the Federal Reserve Bank of New York in 2007, I feel right at home here today.

My remarks will focus on the economic outlook. I do this with some trepidation, of course. In the private sector there are two adages about forecasting that underscore the need to be humble in this endeavor: First, forecast often. Second, specify a level or a time horizon, but never specify both, together.

But more seriously, despite the difficulties in making accurate forecasts, we still need to understand as best we can why the economy is performing the way it is, what that implies about the economic outlook, and, how policymakers can respond to generate better outcomes. We live in a highly complex and uncertain world, but we need to make as much sense out of it as possible. As always, what I have to say reflects my own views and not necessarily those of the FOMC (Federal Open Market Committee) or the Federal Reserve System.

My attention today will be on three important questions:

  • Why has the U.S. recovery been so sluggish and consistently weaker than expected?
  • What should we, as monetary policymakers, do it about it?
  • What other policy actions are needed to help ensure a timely transition to strong and sustainable growth?


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