Economics
Kaplan Favors Fed Rate Pause at Neutral With Eye on Yield Curve
- Dallas Fed chief leans to a ‘step back’ after hitting neutral
- Kaplan says he doesn’t discount the significance of inversion
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Federal Reserve Bank of Dallas President Robert Kaplan said the central bank should continue raising interest rates until they hit neutral, the level that neither stokes nor slows economic growth. At that point, he might favor a pause.
“I would be inclined to step back and assess the outlook for the economy and look at a range of other factors -- including the levels and shape of the Treasury yield curve -- before deciding what further actions, if any, might be appropriate,” Kaplan wrote in an essay on the economy and monetary policy published Tuesday.