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Dallas Fed President (shrink & hold)

Dallas Fed President Rob Kaplan said that he supports a move to shrink the balance sheet as soon as possible.

The Dallas Fed president signaled that another rate hike at the end of the year was not a given. He said the central bank could afford to be “patient” and see if inflation pressures pick up.

He said Fed policy may not be as easy as many people think. The longer-run neutral level for short-term interest rates is somewhere in the 2% range rather than the 3% range, he said.

Kaplan is a voting member of the Fed policy committee this year.

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