Fed’s Kaplan: As we’re making progress towards our goals, it would be healthier to wean off these extraordinary measures

Remarks by Dallas Fed president, Robert Kaplan, to the Wall St Journal

  • Agrees with the current Fed policy stance
  • Fed should be using its tools aggressively during times of a crisis
  • There’s reason to be optimistic about the future
  • But we are not out of the woods just yet
  • Raising short-term rates off near-zero levels does not necessarily translate to pulling back support for the economy
  • Willing to be much more accommodative in the months, years ahead to reach Fed goals but that does not necessarily mean near-zero rates

Just keep in mind that Kaplan is one of the few that projected a rate hike for 2022 based on the Fed’s dot plots last month. He isn’t a voting member in this year’s FOMC (and also next year) but he will be for 2023 – assuming he stays on the post.

His remarks above are mostly conjecture as he does reaffirm that the Fed’s current policy stance is appropriate. But the rest will depend on how economic conditions develop in the months ahead, even if he is one of the more hawkish voices.

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