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Fed's Kaplan says 1.5%-1.75% range is 'roughly appropriate' setting for fed funds rate

Fed's Robert Kaplan from Dallas, who is a centrist and a voting member this year is crossing the wires. 

 

  • Fed's Kaplan sees 2% to 2.25% US GDP growth this year, if anything outlook has 'firmed' in recent weeks.
  • Kaplan sees unemployment rate falling further, inflation rising to 2% goal.
  • Kaplan says a 'material change' to him means a change in outlook for growth versus potential.
  • Kaplan says in weighing a possible rate change, he will look at growth, inflation, and financial stability.
  • Kaplan says he'd be willing to tolerate inflation above 2%, but would also take financial stability into account.
  • Fed's Kaplan says he wants to actively explore options to restrain growth in fed's balance sheet.
  • Fed's Kaplan says he wants to keep Fed balance sheet growth from fueling financial excesses, imbalances.
  • Kaplan says he is open to longer-term averaging for inflation target, but does not want it as a 'commitment'.

About Kaplan

Kaplan (centrist): The Dallas Fed chief is no bullish on the economy but is watching the yield curve. Should we see rats on the long end tick higher, he will likely be on the air of caution and want to see a dovish committee taking heed,

– Effects of a politicized Fed on markets during US election year

As a voting member and being a centrist, his comments are critical this year – which way will he be swayed? All eyes on inflation running much higher than his tolerance level. 

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