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2026-05-27 00:11:17
[Former New York Fed President Dudley Warns of Potential Loss of Fed Credibility] Former New York Fed President William Dudley stated that the Federal Reserve's failure to achieve its 2% inflation target for many years is jeopardizing its credibility, and market inflation expectations may spiral out of control. He pointed out that persistently high inflation, rising long-term inflation expectations, and continued strong economic growth in a high-interest-rate environment mean that monetary policy tightening may be less aggressive than the market anticipates. Dudley also mentioned that structural factors such as investment in artificial intelligence and high levels of government debt could push up the neutral interest rate; furthermore, political pressure and leadership changes have exacerbated uncertainty.
