NEW YORK, June 24 An influential Federal Reserve
policymaker said on Monday that financial-system instability can
impair the effectiveness of monetary policy, and the U.S.
central bank must consider this when formulating its policies.
"The central bank has a major role to play in ensuring
financial stability and should evaluate the stance of monetary
policy in light of problems in the financial system that may
impair the monetary policy transmission mechanism," New York Fed
President William Dudley said in a speech in Basel, according to
They were Dudley's first public comments since the Fed last
week said it expected to reduce its asset purchases later this
year and halt the stimulus program altogether by mid-2014, if
the economy improves as forecast.