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Robert Kaplan, president of the Federal Reserve Bank of Dallas, estimates that it is unlikely that the unemployment rate will decline further.
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David Paul Morris / Bloomberg News
Dallas Federal Reserve Chairman Robert Kaplan said on Tuesday that he was supporting the US central bank to "progressively and patiently" raise interest rates.
Mr. Kaplan said "comfortably" if, over the next year or so, the Fed had raised rates "three more times … That does not seem unreasonable to me," he said. he acknowledged. Knowing that one should know that monetary policy stops being stimulating and it limits the growth of growth is quite uncertain, he said that he would like to get these rate hikes in place , assuming the economy is working as expected, then take stock of its current situation.
"What we do beyond [the three increases]I was candid saying, "I do not know," Kaplan said.
The Fed official also said: "We believe the Fed is achieving its dual mandate goals" in terms of job performance and inflation.
Kaplan said it was unlikely that the unemployment rate would see further declines. The Fed has reached its inflation target of 2% and "I do not think inflation escapes us," said Kaplan. The price pressure arc leaves the Fed "some leeway as to how quickly we raise interest rates," he said.
Mr. Kaplan was speaking at a meeting of the Economic Club of New York. He is not currently a voting member of the Federal Open Market Committee, a committee that sets interest rates. This body met at the end of September and raised rates for the third time this year, bringing the central bank target rate range to between 2% and 2.25%.
The Fed is generally expected to raise rates by the end of the year and make further increases next year. The result is an increase in the cost of short-term borrowing to preserve the economy from what policy makers see as a risk of overheating.
Last Friday, the government announced that unemployment had fallen to its lowest level since the Vietnam War. Although wage gains remain modest, the robust employment report has helped to maintain the warming outlook for this income measure. Fed officials want to keep this under control to ensure that expansion can continue.
Write to Michael S. Derby at [email protected]
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