Fed’s Kaplan: Current Fed funds rate is probably appropriate for US economy

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In an interview with the Wall Street Journal, Dallas Fed President Robert Kaplan argued that the current Fed funds rate was “probably appropriate” for the U.S. economy and called it “mildly accommodative.”

Key quotes (via Reuters)

  • Would not give a definitive answer on whether lower inflation rates alone would justify a rate cut.
  • Still have an open mind on inflation review, but would not want to restrict Fed’s ability to be flexible.
  • Political considerations play no role in Fed policymaking.
  • A ‘gold standard’ would have reduced the Fed’s options in response to economic downturn.
  • Corporate debt is not a systemic risk but could amplify downturn.
  • Do not see inflation ‘running away from us’.
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