Fed’s Dudley estimates the US economy to grow by 2%

Arif Gunawan Sulistiyono

President of Federal Reserve Bank of New York William C. Dudley has predicted that the US economy would grow by around two percent until the end year of 2017, backed by the consumption.

“Looking forward, I expect economic activity to expand at roughly a 2 percent annualized pace over the next 18 months, appreciably above that of the past three quarters,” he said in his remark in the Executives’ Meeting of Asia Pacific Central Banks (EMEAP) on Monday.

Over the remainder of this year, he continued, the US economy should continue to get some lift from consumption and from a fiscal policy stance that would remain mildly stimulative.

Currently, the US economy represents a roughly 25 percent at current exchange rates, putting the US dollar as the most important international reserve currency. More than 60 percent of central bank reserve assets are denominated in dollars, and that share has been stable to rising in recent years.

“Most foreign trade is denominated in dollars and most of the foreign currency debt issued by corporations abroad is denominated in dollars. Thus, what happens to the U.S. economy, U.S. financial asset prices and the exchange value of the dollar has important implications for the global economy,” Dudley said.

Bank Indonesia’s (BI) executive director of communication Tirta Segara said the global economy must consider the diverged policies in the advanced economies. While the US was aiming for a tightened policy, Japan was advancing into loosened monetary policy by doubling stimulus. (ags)