The recent drop in stocks has not fazed New York Fed President William Dudley’s view that the economy is strong.
“So far I’d say this is small potatoes,” Dudley told Bloomberg News on Thursday. “The little decline that we’ve had in the equity market today has virtually no implications for the economic outlook.”
“Clearly the market is adjusting to the fact that the global economy is growing quite quickly, and as a consequence of that, monetary authorities around the world are either starting to remove accommodation or are thinking about starting to remove accommodation,” Dudley said. “So bond yields have moved up, and as bond yields have moved up, that’s put a little bit more pressure on the equity market.”
On Thursday, the Dow Jones Industrial Average dropped 4.15% or 1,032 points, the second-worst point drop in history. The S&P 500 fell 100 points or 3.75% and the Nasdaq Composite was down 274 points, or 3.9%.