Difficult for Fed to Avoid Bond Taper Tantrum: Dudley

The transcript discusses the Federal Reserve's role in supporting the economy, the potential impact of vaccination on economic recovery, and the challenges of financial stability. It highlights the Fed's cautious approach to withdrawing support to avoid market disruptions and addresses the risks associated with mutual funds investing in illiquid assets.

In what ways could a 'taper tantrum' affect the financial markets according to the text?

What is the significance of mutual funds investing in illiquid asset classes as mentioned in the text?