Fed's Dudley Says No Fed Tightening Soon, and Not to Worry about Food Inflation because iPad Deflation Makes Up for It

I wonder if these guys at the Fed understand income distribution in this country and the fact that those who skew in the bottom half of the economic strata are not going to be pleased that food inflation is being offset by iPad deflation.  Apparently not.  Showing he lives in the same ivory tower as his peers, it appears William Dudley was asked a series of questions about food inflation, and countered that while there is inflation in things we need, we have deflation in other places - hence no problemo.  I am sure the millions sleeping hungry each night will be comforted by this fact as they surf the internet on their iPad.  Dudley probably was confused about the laughs the audience gave that sort of remark...

Oh and don't worry - the Fed won't be tightening soon.  By soon I assume this decade.

• A top Federal Reserve official signaled on Friday the central bank won't tighten monetary policy any time soon, even as the jobs recovery looked set to quicken.  New York Fed President William Dudley told business leaders in Queens, New York, that the economic outlook has improved in the past six months. But he said, the Fed is still "very far away" from achieving its dual mandate of high employment and price stability. "Faster progress toward these objectives would be very welcome," he said.
• Dudley, who was a core advocate for the Fed's easy money policy, is seen as one of the more "dovish" members of the Fed's policy-setting Federal Open Market Committee.
• "Although there is still uncertainty over the timing and speed of the labor market recovery, I do expect job growth will increase considerably more rapidly in the coming months," Dudley said. "A substantial pick-up is sorely needed."  Even if the economy were to add 300,000 jobs per month, though, there would still be considerable slack in the labor market through 2012, he said.
• Dudley reiterated that a stronger recovery is not a reason for the Fed to reverse course.

Now the funny part...

• Dudley faced persistent questions from the audience on food inflation. The president of the Federal Reserve Bank of New York said people forget that even as the price of food is rising, other prices are falling. He mentioned the price of the iPad 2, prompting guffaws from the audience.
• "While rising commodity prices may be giving some of you a bad headache, they are not likely to lead to a sustained rise in inflation to levels inconsistent with our dual mandate," Dudley said.

Yes Mr. Dudley - I am sure rising food and energy is giving a room full of business leaders making 6 or 7 figures a few headaches.  It's a bit more of an issue for the average American however.