Strong US economy needs no more QE, says Fed’s chief dove
THE US does not need more quantitative easing (QE), a top Federal Reserve policymaker said yesterday, reversing his previously dovish stance.
New York Fed boss Bill Dudley said the economy is steadily improving and using up slack, limiting the need for further support.
“I think it’s hard to argue that we absolutely must do something more in terms of the monetary policy front,” Dudley told CNBC.
However, “if downside risks from, say, Europe or the US fiscal cliff were to really intensify, then I think you’d absolutely have to consider further monetary policy moves.”
Meanwhile new figures from the US Labor Department showed initial jobless claims barely changed last week at 370,000, down 2,000 on the week.
Manufacturing data out yesterday also showed a slowdown in economic improvements, with Markit’s purchasing managers’ index (PMI) coming in at 53.9 in May, down from 56 in April.
Although it represents a slowing in activity, the PMI is still firmly above the “no change” level of 50.