Bill Dudley, Columnist

If Stocks Don’t Fall, the Fed Needs to Force Them

Tightening financial conditions will be key to getting inflation under control.

April 6, 2022 at 6:00 AM EDT

Corrected

April 7, 2022 at 9:33 AM EDT

Bill Dudley, a Bloomberg Opinion columnist, served as president of the Federal Reserve Bank of New York from 2009 to 2018. He is the chair of the Bretton Woods Committee, and has been a nonexecutive director at Swiss bank UBS since 2019.

Bill Dudley Says Fed Might Need to Force Stocks to Fall

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It’s hard to know how much the U.S. Federal Reserve will need to do to get inflation under control. But one thing is certain: To be effective, it’ll have to inflict more losses on stock and bond investors than it has so far.

Market participants’ heads are already spinning from the rapid change in the outlook for the Fed’s interest-rate policy. As recently as a year ago, they expected no rate increases in 2022. Now, they foresee the federal funds rate reaching about 2.5% by the end of this year and peaking at more than 3% in 2023.

Before it’s here, it’s on the Bloomberg Terminal

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