Dallas Fed president Kaplan speaking on CNBC
- Would be wise to take the foot off breaks sooner versus later
- We are moving toward weathering the pandemic
- Some restraint on asset purchases would be useful.
- At this stage MBS purchases maybe having unintended side effects
- We have cross currents as it relate to inflation
- Cycle elements from the reopening
- Structural elements include cap ex which are increasing prices
- There are some supply/demand issues in the labor market that may be somewhat persistent.
- Keeping an eye on excess risk-taking
- Taking foot off the accelerator very gently may help manage risks
- You don’t want to be so preemptive that you choke off the recovery.
- There is a lot of attractiveness around the world for the US dollar and US debt
- Fed will need to telegraph intentions and taper well in advance and should adjust purchases gradually
- Would be helpful and unsurprising to seek tenure yield drift up
- The labor force is a bit tighter today than the headline numbers suggest.
- Have our work cut out for getting people back in the workforce and also into schools to increase the skills trading workers
Feds Kaplan is probably the most hawkish of Fed Presidents. He is also the president of the Dallas Fed which has been one of the strongest regions in the US thanks to the energy markets but also a transition into technology in recent years.
Tomorrow is the last day before the Fed’s blackout period begins. The next meeting is June 15-16. The blackout period begin the second Saturday preceding a Federal Open Market Committee (FOMC) meeting and ends the Thursday following a meeting unless otherwise noted. That would begin on Saturday.