Dudley: Some Pockets In Financial Markets “Are Concerning”

Dudley: Some Pockets In Financial Markets “Are Concerning”

New York Federal Reserve President William Dudley spoke with FOX Business Network’s (FBN) Peter Barnes about bubbles in the financial markets saying, “there are pockets that are concerning” and that “Leverage loan markets for example are quite frothy.”  When asked about inflation getting out of control Dudley said, “that’s not going to happen” because “we actually have really good tools.”

Play Quizzes 4

Excerpts from the interview are below.

London Value Investor Conference 2022: Chris Hohn On Making Money And Saving The World

business activist 1653311320Chris Hohn the founder and manager of TCI Fund Management was the star speaker at this year's London Value Investor Conference, which took place on May 19th. The investor has earned himself a reputation for being one of the world's most successful hedge fund managers over the past few decades. TCI, which stands for The Read More

Dudley on how to ensure sure inflation doesn’t get out of control:

“Well, that’s not going to happen.  It’s not going to happen for the simple reason that we actually have really good tools.  The first tool we’ve got is our – in 2008, it’s part of the TARP legislation, the ability to pay interest on excess reserves so as we raise the rate that we pay banks on the reserves, that induces them to hold those reserves rather than lend those reserves out.”

Dudley on whether there are any bubbles in the financial markets:

“Well we look at the financial issues all the time to asset whether the current level interest rates is going to generate excesses in financial markets. Excesses that we need to be concerned about in terms of financial stability. I would say there are pockets that are concerning. Leverage loan markets for example are quite frothy, but that’s not a very big market. The thing that we don’t see that we saw in the run up to the last financial crisis is we don’t see a lot of increases in leverage and we don’t see a lot of credit growth.  So the absence of credit growth, the absence of leverage, the fact that the markets are frothy, are small rather than large, makes us reasonably confident that we don’t — that we’re not taking a lot of financial stability risk at the current time.”

Updated on

Sheeraz is our COO (Chief - Operations), his primary duty is curating and editing of ValueWalk. He is main reason behind the rapid growth of the business. Sheeraz previously ran a taxation firm. He is an expert in technology, he has over 5.5 years of design, development and roll-out experience for SEO and SEM. - Email: sraza(at)valuewalk.com
Previous article “Valuation – It’s All Relative” – DoubleLine CAPE Slides
Next article Start Saving for College Now, or Pay Much More Later

No posts to display