Quantitative easing and exit strategies

William Dudley, president of the Federal Reserve Bank of New York, spoke with Economist and the complete interview is published here. He answers to the following questions:

• Treasury yields are up sharply in the past few weeks. Why?
• Under what circumstances would you expand purchases of long-term securities?
• What limitations do you have to keep in mind when considering expanding purchases?
• How do you transition to no more purchases?
• How do you respond to fears you’ll inflate?
• How will your balance sheet eventually shrink?
• What do you say to charges that these unconventional strategies have compromised the Fed’s independence?
• How has the job of managing the Federal Reserve Bank of New York changed?