Fed official declares economy looks better

November 18, 2013

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After the surprisingly positive October jobs report was released on Nov. 8, debate over when the Federal Reserve will begin to taper its stimulus program known as quantitative easing has been brought forward.

William Dudley, Federal Reserve New York Bank president, stated that he is more hopeful about the economic recovery.

"There are some nascent signs that the economy may be doing better," Dudley told Bloomberg.

The economy grew at a rate of 2.8 percent in the third quarter of 2013, more quickly than the 2.5 percent growth recorded in the second quarter. The increase is a good sign that factors previously holding economic growth back are beginning to subside. According to the Department of Labor, 204,000 jobs were added to the economy in October. Fed officials have stated the economy needs to recover at a rate of 200,000 jobs or more every month before the bank will reduce quantitative easing.

With Dudley stating his optimism, it is more likely the Central Bank will begin to reduce spending next month rather than later in 2014. CNBC reported that the last time Dudley made a public statement he adamantly agreed the economy needed more help from the Federal Reserve. For homebuyers, the bank's decision will have an effect of mortgage interest rates.

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