SINGAPORE (Reuters) – There is a strong case for a 50 basis point cut in U.S. interest rates, former New York Federal Reserve President Bill Dudley said.
“I think there is a strong case for the 50, whether they do it or not,” he said at the Bretton Woods Committee’s annual Future of Finance forum in Singapore.
Interest rates are currently about 150 to 200 basis points above the neutral rate for the U.S. economy, where policy is neither restrictive nor accommodative, he said. “So the question is: Why don’t we start from scratch?”
Dudley had earlier called on the Fed to start cutting interest rates in July. U.S. yields fell in Asian trading on Friday while interest rate futures rose in response to media reports that next week’s decision on whether to cut rates by 25 or 50 basis points was a tough call.