Category Archives: Economics

Bernanke defends Fed Actions, Fed Predictions Gloomy

Fed Chief Defends Steps Taken to Contain Crisis
Switching from political cartoons to the economy…
The chairman of the Federal Reserve, Ben S. Bernanke, vowed on Wednesday to do whatever it took to pull the economy out of its downward spiral, even as he acknowledged that the most recent indicators were “dismal.”
Mr. Bernanke defended the central bank’s efforts and tried to allay concerns that it had been printing money at a dangerous pace.
“The Federal Reserve has done, and will continue to do, everything possible within the limits of its authority to assist in restoring our nation to financial stability,” he said.

The real kicker is down in the piece:
The “central tendency” of forecasts by the presidents of the Federal Reserve’s district banks and of governors on the Federal Reserve Board showed that they expected unemployment to reach 8.5 to 8.8 percent in 2009. Last October, policy makers expected unemployment to top out at 7.1 to 7.6 percent.
Fed policy makers also expect the economy to shrink this year in a range of 0.5 to 1.3 percent, which mainly reflects deepening gloom about the severity of the downturn in the first half of this year. Last October, most Fed officials had predicted that the United States would come out of the recession quickly enough to end this year with a small gain.

Anecdotal note. The Fed’s meetings are expanding from 1 to 2 days through 2010.
The Head of the Chicago Fed so has a recent speech on the state of the economy–his own view, not the consensus of the FRB system.

Dudley succeeds Geithner as NY Fed Head

New York Fed Names William C. Dudley President
NEW YORK–William C. Dudley was named today to serve as president and chief executive officer of the Federal Reserve Bank of New York. His appointment by the board of directors of the New York Fed, succeeding Timothy F. Geithner who was sworn in as Secretary of the Treasury yesterday, was approved by the Federal Reserve Board of Governors.
Stephen Friedman, chairman of the New York Fed’s board of directors and of the search committee that selected Mr. Dudley, said, “We were fortunate to have an exceptional slate of candidates for the post. The board is very pleased with the selection of Bill Dudley. His deep economics background, extensive working knowledge of the markets and hands-on policy making role make him an outstanding choice to succeed Tim Geithner.”
Denis M. Hughes, deputy chairman and a member of the board search committee, said, “Bill has led our Markets Group at a crucial time and helped conceptualize, develop and manage many of the Fed’s responses to extraordinary financial conditions. Under his leadership, the New York Fed will continue to work closely with the Treasury and the Board of Governors in dealing with the economic situation we confront.”
Mr. Dudley, 56, was executive vice president of the Markets Group at the Federal Reserve Bank of New York. He was also the manager of the System Open Market Account for the Federal Open Market Committee. He oversaw domestic open market and foreign exchange trading operations and the provisions of account services to foreign central banks. Dudley expanded the Federal Reserve’s contacts with the buy-side investment community and through the Bank’s Treasury Market Practices Group was active in pushing forward the implementation of new best practices.
“I am honored to have this opportunity to lead an institution of such high quality–its people and their collective commitment to the public good are exemplary,” said Bill Dudley. “The New York Fed, standing at the critical intersection of the financial markets and the banking system, has a leading role to play in assisting in the reform of the architecture of the U.S. and global financial system to ensure that what has transpired over the past year can never occur again.”
Prior to joining the Bank in January 2007, Mr. Dudley was a partner and managing director at Goldman, Sachs & Company and served for a decade as the firm’s chief U.S. economist. At Goldman he held a variety of positions including senior foreign exchange economist. Prior to joining Goldman, his work focused on regulatory and payments issues as a vice president at Morgan Guaranty Trust Company and as an economist in the financial studies department at the Board of Governors of the Federal Reserve System. He has been a member of the Technical Consultants group to the Congressional Budget Office and a member of the Economic Advisory Committee to the New York Fed.
Mr. Dudley received his doctorate in economics from the University of California, Berkeley in 1982 and a Bachelor of Arts degree from New College, Sarasota, Florida in 1974.
Mr. Dudley and his wife, Ann E. Darby, reside in New Jersey.