Dudley suggests taper off until 2014

"We have yet to see any meaningful pickup in the economy’s forward momentum,” says FRBNY chief Bill Dudley, explaining the decision not to go forward with the taper last week. His comments suggest his current thinking has the taper on hold until 2014:

"As we move into 2014, the fiscal headwinds should abate somewhat.  As that occurs, the improving underlying fundamentals of the economy should begin to dominate, pushing up the overall growth rate.'

“I’d like to see economic news that makes me more confident that we will see continued improvement in the labor market. Then I would feel comfortable that the time had come to cut the pace of asset purchases,”

Comments (8)
  • snoopy44
    , contributor
    Comments (1467) | Send Message
    Duh!!!! Of course the taper is off until 2014 for several good reasons:
    1. There is not enough time between now and December to establish a meaningful "trend" in improved economic data. Therefore tapering at October or December meetings is out of the question.
    2. Bernanke retires in January. No way tapering happens that month.
    3. New Fed Chief's first meeting is March 2014. This would be the absolute EARLIEST a taper announcement would happen. More likely that it occurs 2-3 months into the new Fed chief's term.


    In short, keep throwing the paper currency on the bonfire. By next year the Fed will have over $4 trillion on their balance sheet. Good luck with trying to extricate themselves from that mess.


    As Jesse Ventura said in the "Predator", "...you lose it here and you are in a world of hurt." Guess what? The Fed has already "lost it here".


    23 Sep 2013, 11:04 AM Reply Like
  • bigbenorr
    , contributor
    Comments (1154) | Send Message
    why does it seem like the past 3-4 years they have been saying the same thing. "Well this year kind of sucks, but next year will be better. For real this time......"
    23 Sep 2013, 11:13 AM Reply Like
  • whidbey
    , contributor
    Comments (3539) | Send Message
    Sadly, he is likely sincere. His theme song is "Keep thinking about tomorrow". Until Congress notices they are needed to take on the Whitehouse, we are hurting.
    23 Sep 2013, 11:40 AM Reply Like
  • minecanary
    , contributor
    Comments (1240) | Send Message
    Don't expect Yeller to do any cutting back in her first few years. Then we'll need to start fudging the data to bolster Hillary's WH run. Fukashima will blow before any sanity returns to the FED
    23 Sep 2013, 11:43 AM Reply Like
  • mobyss
    , contributor
    Comments (2596) | Send Message
    More and more panic in hopes that SOMETHING will finally get this economy moving again four plus years after the recession "ended".
    23 Sep 2013, 12:58 PM Reply Like
  • kmi
    , contributor
    Comments (4584) | Send Message
    Meanwhile, over at FT's Alphaville, the suggestion is the Fed is indeed tapering... just not in the highly visible way the market expected. Very good read:


    23 Sep 2013, 01:13 PM Reply Like
  • june1234
    , contributor
    Comments (4356) | Send Message
    Stay tuned for the next episode of Days of our Fed; try planning a picnic around their weather reports
    23 Sep 2013, 01:23 PM Reply Like
  • William Koldus, CFA, CAIA
    , contributor
    Comments (1700) | Send Message
    The Fed, our economy, and global economies are addicted to QE. I predicted (see my past articles) that they would not taper in September. It will be hard for the Fed to ever pull back. Forget selling securities, the only hope is for a run-off type of unwind, but that likelihood is looking more and more unfeasible as the size and scope of central bank balance sheets continue to expand.
    23 Sep 2013, 01:33 PM Reply Like
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