Fed's Dudley: Europe Among Economy's Big Headwinds

New York Federal Reserve President William Dudley said on Monday the U.S. economy still faces serious headwinds, including spillover effects from Europe, adding the central bank will continue to do everything within its power to help.

Europe's sovereign debt crisis has weakened the outlook for global growth and with it, U.S. exports, Dudley said in the text of remarks prepared for delivery in speech to Fordham University's Gabelli School of Business.

He also listed problems in the housing market as a main stumbling block for the U.S. economy, calling it a serious impediment to a stronger recovery.

Without robust growth, the economy is more vulnerable to negative shocks, which unfortunately seem to keep coming, the influential U.S. central banker said. It is like riding a bicycle -- at a slow speed, the bicycle wobbles and the risk of falling rises.

The inflation rate, which is now higher than the Fed would like, should fall late this year and next, barring more energy price jumps, Dudley added.