The New Dallas Fed President Has a Very Different View Than His Predecessor
- In first policy speech, says accommodation still appropriate
- Notes that near-zero rates risk causing economic imbalances
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Robert Kaplan broke from his predecessor’s inflation-hawk tradition in his first policy speech as president of the Federal Reserve Bank of Dallas, saying that monetary policy ought to remain easy for some time.
"In my view, the FOMC -- in the previous two meetings -- has been prudent in waiting for more data before taking policy action," Kaplan said in remarks prepared for a speech in Houston on Wednesday. Kaplan cited ongoing external risks, including those from China, among the reasons for caution. At the same time, “accommodative policy does not necessarily mean a zero fed funds rate,” which is where it’s been held since 2008.