Fed’s Kaplan: Jury is out on whether we’ll see sustained price rises

Comments from the Dallas Fed President on CNBC:

Comments from the Dallas Fed President on CNBC:
  • Base case is to see a temporary surge in prices this year so that inflation will settle down next year
  • Says his forecasts has improved meaningfully
  • Expects 6.5% growth and 4.5% unemployment this year
  • He will advocate for scaling back stimulus after he sees strong outcomes, not just strong forecasts
  • Says he expects Fed to start raising rates in 2022
  • Says his forecast for removing accommodation is more aggressive than the median
  • First step to withdrawing accommodation is to reduce asset purchases
  • Says he would expect the 10-year yield to continue rising from here to 1.75%-2.00%
  • Still believes inflation will prove somewhat temporary and will settle down next year

I appreciate the humility in his comments regarding inflation. He also takes out some of the mystery of the dots as there are only 4 of them showing hikes in 2022.

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