Federal Reserve's Dudley Hints at Further Action to Ease Money Supply

Federal Reserve's William DudleyFederal Reserve Bank of New York President William Dudley said further monetary action by the Fed may be warranted because of high unemployment rates and low inflation, Bloomberg News reported, citing a speech Dudley made Friday at the Society of American Business Editors and Writers conference in New York.

Dudley said that if the Fed acquired more mortgage debt or Treasuries, it would help boost home and stock values by making home loans cheaper and enabling business to borrow money at lower rates, the wire service reported.

While Dudley discounted the chance of the U.S. falling back into a recession, he said he was concerned about the amount of time the economy will take to return to full employment and price stability. He estimated that $500 billion of mortgage-debt or Treasury purchases would have an equivalent effect on the economy to cutting the Federal Reserve benchmark interest rate by .5% to .75%, according to Bloomberg.

The yield on the 10-year Treasury note actually rose last month to 2.53% from 2.47%, though it has fallen from its 3.85% rate at the end of last year.

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

Add a Comment

*0 / 3000 Character Maximum

3 Comments

Filter by:
prognesub

The Fed has no other chioce but to Print Baby Print !

October 03 2010 at 7:25 PM Report abuse rate up rate down Reply
scottee

The Fed has to STOP PRINTING AND DILUTING OUR DOLLAR! and they need to stop manipulating gold prices, stock prices and interest rates. let the free markets decide. and by the way, The Fed needs to be audited and ended!

October 02 2010 at 8:17 PM Report abuse rate up rate down Reply
Peace Me & Jazzy

HEY I HEARD THAT U PROVIDE TO DEAF AND DISBALY AND POOR PEOPLE 70.000 PER FROM FEBERAL SO I NEED TO KNOW IF IT TRUE NEWS THANKS HERE US MISSPEACEME@AOL.COM

October 01 2010 at 6:55 PM Report abuse rate up rate down Reply