Fed’s Dudley: It may be too late to fend off a recission

Overnight, Fed’s Dudley to Bloomberg said that:

• Historically deteriorating labor markets generate a self reinforcing feedback loop
• When jobs are hard to find, household trim spending, the economy weakens, and businesses reduce investment, which leads to layoffs and further spending cuts.
• Although it might already ready to fend off a recession, dawdling now unnecessarily increases the risk

Job losses beget job losses. Dudley is fearful that the momentum has already started and that will continually weaken the economy.

US stocks are sharply lower with the NASDAQ now down -2.10%. The S&P is down -1.48%.

This article was written by Greg Michalowski at www.forexlive.com.