Dudley Says Fed Credibility at Risk on Years of Missing 2% Goal

Former New York Federal Reserve President Bill Dudley warned the US central bank is in danger of losing credibility as an inflation fighter after a longstanding failure to reach its 2% goal.

“We have been above the Fed’s inflation target for more than five years,” Dudley said Tuesday on Bloomberg Television’s Surveillance. “And there is a risk that inflation expectations do finally become unanchored.”

His remarks underscored the challenge facing new Fed Chair Kevin Warsh, who is poised to preside next month over his first meeting of the rate-setting Federal Open Market Committee. Warsh takes over on the ...