New York Federal Reserve Bank president William Dudley Monday night said that though both inflation and the pace of economic recovery are subdued, interest rates won’t stay low forever.

“The excess slack in the economy is fairly large and the pace of recovery is likely to be moderate,” Dudley said, answering questions following an evening address to Fordham University School of Law. The combination is likely to keep interest rates low “but not indefinitely,” he said.

Earlier, Dudley said he sees only a moderate recovery, one that is “disappointing” even though the economy is now much improved. Therefore, he said the Fed intends to keep its accommodative policies for the “extended period” that has been promised repeatedly.

— Market News International

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