"Although it might already be too late to fend off a recession by cutting rates, dawdling now unnecessarily increases the risk," the former New York Federal Reserve President said.
But to Dudley, even this is too late, and central bankers would do better to pivot rates at next week's policy meeting.
AdvertisementAccording to Dudley, this slowdown points to fewer jobs down the road, and an uptick in unemployment could set off a near-certain recession indicator: the Sahm Rule.
Despite this, Dudley suggested that the Fed might not be as concerned about breaching the Sahm Rule as it should be.
According to Dudley, there are two other reasons the Fed may be waiting for September to cut rates.
Persons:
—, Bill Dudley, dawdling, Dudley, Jerome Powell, Claudia Sahm, I'm
Organizations:
Service, Bloomberg, New York Federal, Business, Fed
Locations:
Dudley