NY Fed's Dudley: Expect Low Rates for Quite Some Time
There's no denying that the panic is over, even I can admit that. But if these little pricks don't pull the plug on the funny money and jack up rates in time, we're screwed. Not just sort of screwed like we've been up until this point but absolutely screwed. What's their incentive to keep ZIRP? It's not like the banks are lending, so that can't be it.
What is it, Dudley? Are you a heartless bastard? Do you realize my grandma is getting 1% returns on her CDs? ONE PERCENT, YOU ASSHAT.
Pull out, bitches. There's no time like the present. Or maaaaaybe the problem is that they know deep down in the rotten chest cavities where their hearts should be that all of this talk of a recovery is, in fact, bullshit.
As I said, we know we're not in a panic but it certainly isn't over yet.
A tepid economic recovery should allow the U.S. Federal Reserve to keep interest rates at rock-bottom lows for a prolonged period, New York Federal Reserve President William Dudley said on Monday.
Because the U.S. economy faces many headwinds, including an anemic labor market and a fragile banking system, Dudley said, inflation will not become a problem in the foreseeable future.
"The recovery will turn out to be moderate by historical standards," Dudley said in a speech at Fordham Law School. "The banking system has still not fully recovered."
Given the vulnerability of financial institutions, falling commercial real estate values will continue to pressure profits, putting a damper on lending, said Dudley, whose role at the New York Fed includes direct supervision of banks.
Dudley's outlook for the economy was cautiously sanguine. He touted a rebound in financial markets that has seen major U.S. stock indexes surge more than 50 percent from their March lows, saying a virtuous cycle was replacing the vicious circles that brought the global financial system to the brink of collapse last year.
Don't pardon my french: fuck the banking system.
Despite the prospect for a resumption of growth, Dudley said many factors are likely to keep the economy operating below its full potential in the near future, which should help to keep inflation at bay.
"The unemployment rate is much too high. This means the economy has significant excess slack and implies that we face meaningful downside risks to inflation over the next two years," said Dudley, a former economist at Goldman Sachs.
The trick for policymakers, he added, is to keep monetary policy at its highly stimulative stance without boosting inflation expectations of consumers and investors.
The best way to do that, argued Dudley, is to make a clear case for the Fed's ability to tighten policy, even with central bank credit to the banking system -- also known as the institution's "balance sheet" -- flirting with record highs above $2 trillion.
Actions speak louder than words, Dudley, and now is not the time for jerking yourselves off over what a great job you've done thus far for our entertainment.
The Fed wants us to believe they can tighten policy and yet they still appear to be passing around the bottle. Suuuuuuuuuuuure, ok, we buy that. While you're up there, Dudley, want to do a little dance too?
Pull out, you idiots, pull out!!!