New York Federal Reserve Bank President William Dudley Tuesday said talk of any exit from quantitative easing is "definitely a tricky subject" but that the Fed has a while to go before considering it.
For an exit to take place would need the U.S. economy to display at "self-reinforcing dynamic" and promises sustainable growth.
"We don't want to talk about" a Q/E exit "so much that people pull their expectations inward," he added, as they anticipate such an exit and move accordingly.
Dudley said he is "not really concerned on inflation" being low in the U.S. but he also added that lower inflation rates "have gotten our attention."
However he added that inflation expectations are not moving lower, and he felt that the expectations would eventually pull the inflation rate up to 2%.
Dudley also said that the Bank of Japan policy "makes complete sense" and was working effectively to aid the economy of that country.
Bank of Japan head Haruhiko Kuroda, he said, is "off to a very strong start."
Dudley also added that the Fed is "not being reckless" and that Fed officials know how to handle the Fed tool chest of exit strategies.
He demurred when asked about the U.S. dollar as he said that subject is left to the U.S. Treasury. However he did say that the dollar is well down on the list of considerations when Fed policy decisions are made.
Dudley answered questions at the Japan Society after delivering a previously reported speech on the "Lessons At the Zero Bound: the Japanese and U.S. Experience."
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