President of NY Fed: Inflation Not Imminent

New York, NY —

The president of the New York Federal Reserve Bank tried to dispel fears of inflation today. WNYC's Lisa Chow reports.

REPORTER: With the Fed pouring billions of dollars into the financial system, will the US face a massive inflation problem down the road?

President of the New York Fed William Dudley says no.

He says the Fed has more tools to fight inflation now, specifically one: the ability to pay interest on balances held by banks.

What that means, is the Fed can essentially pay banks to hold on to their money, instead of lending it out, when the economy recovers.

Investors fear that if money's flying fast and loose again, this could result in inflation.

Skeptics say, no one doubts that the Fed has new tools to fight inflation.

The question is, will the Fed use them at the right time, in the right way. For WNYC, I'm Lisa Chow.