Fed’s Kaplan: Wants ‘gradual’ rate hikes but doesn’t expect ‘pause’ in policy

• March 24, 2017
• realestate
• Business & Markets, Real Estate Finance

Dallas Federal Reserve President Robert Kaplan wants a “gradual and patient” approach to raising interest rates this year but said that doesn’t necessarily include a “pause” in the Fed’s rate-tightening policy. With its rate hike last week, Fed members signaled rough forecasts for two more rate hikes this year. San Francisco Fed President John Williams said Thursday that the Fed could approve up to a total of four hikes this year if economic improvement calls for such action. Kaplan didn’t offer a number of anticipated hikes and said he’d like the opportunity to “turn over more cards” to judge the economy, but said progress toward the dual inflation and employment mandates allowed for more accommodation reversal. That reversal will eventually include letting the Fed’s $4.5 trillion balance sheet run off, but not until more action is taken to get the Fed funds target, the Fed’s main interest-rate tool, back up toward a “neutral” rate. Kaplan said the Fed puts that neutral rate at a median 2.75%. #Fed