FED Watch: Dudley v. Ferguson

Disclaimer: For informational purposes only.

Please see here and here for more information about The Weight of the Evidence.

Discussion

This morning Bill Dudley is out with a Bloomberg op-ed advocating for the Fed to start with 50 and get out of restrictive territory ASAP. He even goes so far to say that policy should actually be “easy” right now given the well-balanced state of the economy, despite also acknowledging the economy is really not all that close to recession:

…although the US economy has slowed a bit and the labor market has weakened, there are few signs that it’s in or near a recession. The Atlanta Fed’s GDPNow model projects annualized, inflation-adjusted growth of 2.5% in the current quarter.

Later this morning Roger Ferguson was interviewed on CNBC. He said that while he wouldn’t be surprised to see a 50 given current market pricing, he would be an advocate for 25 while leaving the door open to going 50 in the event the stock market pressures the Fed to do so.

Given Ferguson’s track record of clear, consistent, and most importantly, accurate guidance on FED policy, combined with the Waller guidance provided September 6, I give the nod to Ferguson over Dudley here.