As the central bank of the United States, the Federal Reserve conducts open market operations with an eye toward stabilizing prices and maintaining full employment.
Argentina significantly overshot its inflation target in 2017 as prices rose almost 25% from the previous year, raising questions about the country's ability to tame a problem that has plagued it off and on for decades. European stocks are a case in point-but the potential for catch-up remains appealing.
While he said the reforms that slash corporate taxes and lower rates for many earners will boost the economy in the near term, that "will come at a cost".
Dudley, a permanent voting member on the Fed's monetary policy committee and a close ally of outgoing Fed Chair Janet Yellen, said record-breaking financial markets appear unconcerned that "the current fiscal path is unsustainable".
The Treasury Department updated its rules for tax withholding from paychecks, changing calculations so most workers will start getting more take-home pay in February as a result of the recently passed tax law.
He noted that corporations and higher-income Americans are less inclined to spend, suggesting "a significant portion of the tax cuts will be saved not spent".
The Federal Reserve Banks' net income in 2017 was estimated at $80.7 billion; Treasury payments are calculated after the costs of operations, dividends and other expenses.
The recent drop in U.S. unemployment could spark a surge in inflation that, given the Federal Reserve's current policy framework, could trigger interest-rate hikes that bring on a recession, Boston Federal Reserve President Eric Rosengren warned on Friday.
In a wide-ranging speech to economists and investors, Dudley also dismissed concerns about a so-called flattening yield curve in which shorter-term bond rates rise and longer-term rates rise. In 2017, such payments increased 13.8 billion dollars.
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