Federal Reserve Bank of New York president William Dudley Friday defended a decision by the Fed’s policymaking Federal Open Market Committee made on Tuesday to hold the federal funds rate near zero for another two years.

He noted that market interest rates have fallen since the FOMC announcement and said that should give the economy a boost.

Dudley, the FOMC vice chairman, made clear that the “extended period” was not the only policy under consideration at Tuesday’s meeting. Though he did not say so, it is widely believed that a possible resumption of quantitative easing — a “QE3” — was on the table as well.

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