He still thinks bond buying is stepping on the gas pedal, when it’s actually the brake pedal.
April 16 (Reuters) — An influential Federal Reserve official said on Tuesday the weak March jobs report made him more cautious on how far the economy has come, and underscores the need for the U.S. central bank to keep buying bonds apace.
In a breakfast address, New York Fed President William Dudley said he expects “sluggish” economic growth of 2 to 2.5 percent this year and only a modest decline in unemployment. The labor market, he said, has not yet shown the substantial improvement the Fed seeks.
A paltry 88,000 new jobs were created last month, well below expectations, while the jobless rate fell by a tenth to 7.6 percent because droves of Americans gave up the search for work.
“While I don’t want to read too much into a single month’s data, this underscores the need to wait and see how the economy develops before declaring victory prematurely,” said Dudley, a permanent voting member of the Fed’s monetary policy committee and a close ally of Fed Chairman Ben Bernanke.
“I’d note that we saw similar slowdowns in job creation in 2011 and 2012 after pickups in the job creation rate and this, along with the large amount of fiscal restraint hitting the economy now, makes me more cautious,” he told the Staten Island Chamber of Commerce.