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Fed’s Kaplan Sees Hike in 2022, Taper Starting Sooner

  • Starting taper sooner will give more flexibility on rate hikes
  • Some inflation pressures will abate, but others may continue
Robert Kaplan

Robert Kaplan

Photographer: David Paul Morris/Bloomberg
Updated on

The U.S. economy will likely meet the Federal Reserve’s threshold for tapering its asset purchases sooner than people think, said Dallas Fed President Robert Kaplan, who has penciled in an interest-rate increase next year.

“As we make substantial further progress, which I think will happen sooner than people expect -- sooner rather than later -- and we’re weathering the pandemic, I think we’d be far better off, from a risk-management point of view, beginning to adjust these purchases of Treasuries and mortgage-backed securities,” Kaplan said Wednesday in an interview with Bloomberg News.