Student debt has some role in lower target Fed rate: Dudley

Reuters News
Posted: Apr 03, 2017 12:03 PM

NEW YORK (Reuters) - Growing U.S. student loan debt is one headwind to overall economic activity and, on the margins, pushes the down the level the Federal Reserve is targeting for equilibrium interest rates, New York Fed President William Dudley said on Monday.

It is "one factor that pushes in that direction," Dudley said of student debt's role in a longer-term decline in the Fed's target "neutral" policy rate. He added that fiscal policies that make colleges and universities more affordable would benefit lower-income students' ability to increase their earnings potential.

(Reporting by Jonathan Spicer; Editing by Meredith Mazzilli)