Former New York Federal Reserve Chairman Bill Dudley said the United States has every reason to cut interest rates by 50 basis points.
Ashley Espinal | Reuters
Former New York Federal Reserve Chairman Bill Dudley said the United States has every reason to cut interest rates by 50 basis points.
“I think the 50 have every reason to do it, whether they want to do it or not,” he told the Bretton Woods Commission’s annual Financial Futures Forum in Singapore.
He said that the current interest rate is 150-200 basis points higher than the so-called neutral interest rate of the U.S. economy, and the policies of the U.S. economy are neither restrictive nor loose. “So the question is: ‘Why not start?'”
Dudley had previously called on the Fed to start cutting interest rates in July. U.S. Treasury yields fell in Asian trading on Friday, while interest rate futures rose on media reports that a decision next week on whether to cut interest rates by 25 basis points or 50 basis points is a close call.
