Policy Punchline

Bill Dudley is a senior research scholar at Princeton University’s Griswold Center for Economic Policy Studies. He served as president of the Federal Reserve Bank of New York from 2009 to 2018, and as vice chairman of the Federal Open Market Committee (FOMC). He was previously chief U.S. economist at Goldman Sachs. He previously came on our show on April 2nd, 2019 to reflect on his career, and he now returns to discuss monetary policies during Covid, the efficacy and necessity of fiscal stimulus, inflation outlook for 2021, the Fed’s switch to “average inflation targeting,” Modern Monetary Theory (MMT), and some of the gravest challenges confronted by central banks today. We started the conservation with a review of the Fed’s unprecedented actions in response to Covid. With the exception of the Main Street Lending Facility, every new policy tool worked well, especially new facilities for public and municipal bond markets. The Fed successfully supported market function and financial stability. The Fed’s