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Recovery from Great Recession ‘bumpy’, says Fed boss

Tuesday 26 October 2010 - by Will Henley

Economic recovery in the United States is set to be “long and bumpy”, according to the president of the Federal Reserve of New York.

In a speech at Cornell University in Manhattan on Monday, William Dudley, president and chief executive of the Fed, warned that US authorities would be unable to “wave a magic wand” to make the problems from the pre-crisis period of “excess” vanish.

Dudley also revealed that the Fed was joining the investigation of a number of financial institutions over their foreclosure practices announced this week by Federal Reserve chairman Ben Bernanke.

The president said: “We are also keeping an eye on banks' potential liabilities where they made representations about mortgages bought by investors that may not have been correct in all cases.

“We want to ensure that the housing finance business is supported by robust back-office operations—for processing of new mortgages as well as foreclosures—so that homebuyers and investors have full confidence in the process.”


Labelling the current recovery “tepid”, Dudley said US authorities would try to provide support for “needed adjustments”.

“The Great Recession spread much pain throughout this region and unemployment remains much higher than we would like,” he said.

“The Fed cannot wave a magic wand and make the problems remaining from the preceding period of excess vanish immediately. But we can provide essential support for the needed adjustments.

“Even with our best efforts, the road to full recovery here in Upstate New York and across the nation is likely to be long and bumpy. But I am confident that we will make it.”


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