NYAIR Episode 48
The Economic Outlook, the Fed & the Implications for Financial Markets
Unlock actionable insights as former New York Fed President William Dudley joins the New York Alternative Investment Roundtable for an unflinching discussion on the economic outlook, central bank intervention, and policy risks that shape the markets. Moderated by Alessandra Tocco, this episode delivers what every asset manager, strategist, and executive must know about rate regimes, fiscal cliffs, moral hazard, and the post-pandemic recovery.
Featured Guests
William Dudley
Former President & CEO, Federal Reserve Bank of New York; Senior Research Scholar at Princeton University
William Dudley is among the world’s leading authorities on monetary policy and global financial stability. As President of the Federal Reserve Bank of New York (2009–2018) and FOMC Vice Chair, Dudley played a pivotal role in the U.S. recovery from the global financial crisis—innovating policy tools, emergency lending, and market rescue operations. Before the Fed, he spent a decade as Chief U.S. Economist at Goldman Sachs. At Princeton, Dudley advises across systemic risk, macro-finance, and digital innovation. He is also a director at UBS, chair of the Bretton Woods Committee, and an influential voice for policymakers and the markets.
Key Insights From This Episode
“Fiscal Cliff” Risk Is Front and Center
While the Fed’s policy tools have stabilized markets, Dudley warns that without renewed fiscal stimulus, household and business income holes risk derailing recovery.
Structural Productivity: Inflation’s Wild Card
The short-term shock suppresses inflation, but long-term costs from supply chain redundancies and re-shoring could feed persistent inflationary pressures.
Moral Hazard and “The New Normal”
Repeated crisis interventions breed expectations of Fed bailouts—raising new risks by eroding private-sector discipline and optimal risk-taking.
The Dollar Remains Dominant—for Now
Despite near-term weakness, liquid capital markets and open convertibility keep the dollar the global reserve currency of choice for the next decade.
Banking System Strength, Non-Bank Fragility
Regulatory changes post-2008 have made banks an anchor of stability, but Dudley flags the leveraged non-bank sector as a future systemic risk.
Access the Full Conversation
Listen to the complete episode and download the custom insights deck loaded with takeaway frameworks for central bank watching, post-COVID sector risk, and long-term capital planning. Whether you’re advising clients or stress-testing scenarios, this conversation is a must for institutional leaders and policymakers.
Soundbites Worth Saving
“The Fed has done what it can. Unless Congress delivers more fiscal support, we risk a sharp drop-off in U.S. recovery.”
— William Dudley
“Every 10 years, major crises drive the Fed to intervene. But each intervention raises the risk of moral hazard the next time.”
— William Dudley
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