Economics
Fed’s Kaplan, Wary of Bubbles, Dissented to Preserve Flexibility
- Sees Fed rates held near zero for at least two or three years
- Dallas Fed chief speaks in interview on Bloomberg Television
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Federal Reserve Bank of Dallas President Robert Kaplan, who dissented at last week’s policy meeting, said he doesn’t want to commit the U.S. central bank to too much monetary stimulus once the economy has recovered from the coronavirus pandemic.
Kaplan said he believes “strongly” that the Fed should keep its benchmark interest rate in a target range of zero to 0.25% until the economy has weathered the pandemic and is “well on track” to full employment and price stability, which could take at least two to three years. Once that is achieved, Kaplan said it’s probably appropriate to remain accommodative or highly accommodative, but he doesn’t want to tie policy makers’ hands too much.