Failure to Understand Basic Macroeconomics
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William Dudley Says Monetary Steps Were Too Timid -

Binyamin Appelbaum:

Fed Official Says Monetary Steps Were Too Timid:

The Federal Reserve’s recent expansion of its economic stimulus campaign was announced as a course correction. It wasn’t that economic circumstances had changed, officials said. They simply had concluded that they needed to do more. The implication, of course, was that the Fed had failed to do enough. William C. Dudley, president of the Federal Reserve Bank of New York, made that point explicit[:]...

Monetary policy, while highly accommodative by historic standards, may still not have been sufficiently accommodative given the economic circumstances.... With the benefit of hindsight, monetary policy needed to be still more aggressive....

Mr. Dudley made no mention of that news. He made clear that the Fed is unlikely to be moved by a few months of good news, in part because officials do not want to find themselves apologizing again for not doing enough.

If we were to see some good news on growth I would not expect us to respond in a hasty manner. Only as we became confident that the recovery was securely established, would I expect our monetary policy stance to evolve.