Fed’s Dudley little concerned about financial risks to US economy

NEW BRUNSWICK, N.J., Nov 29 (Reuters) - William Dudley, president of the Federal Reserve Bank of New York, said on Wednesday he was not too concerned about financial instabilities because the economy is strong and better financial regulations have been put in place since the 2007-2009 crisis.

“I’m not that concerned,” he said when asked about risks of asset bubbles and risky leverage in markets, adding he was “a bit surprised” that investors did not appear too concerned that interest rates were headed higher.

U.S. stock markets have hit record highs and the spreads between short- and long-term bond yields have narrowed significantly in recent months. The Fed meanwhile has raised rates twice this year and expects to hike again next month.

Dudley, who is set to step down in mid-2018, said at Rutgers University that the economic expansion “has a lot more room to go” while regulations adopted in recent years mean the financial system “can bear that stress much, much better than” before the crisis. (Reporting by Jonathan Spicer Editing by Chizu Nomiyama)