New York Fed President William Dudley appears to be taking the lead of the "dove" faction within the Fed. In remarks today, he stated that the current rise in inflation has virtually nothing to do with monetary policy. So far, he sees nothing to worry about inflation expectations. Dudley does not see the Fed's exit from balance sheet expansion as near at hand. He says he would be surprised if QE2 is not completed as planned. However, he did admit that the benefits of QE2 have decreased a little. He still expects the Fed to keep the fed funds rate exceptionally low for an extended period. On the latest jobs numbers, Dudley calls them encouraging but implies that progress could be better.