Dallas Federal Reserve President Robert Kaplan said on Tuesday that he is supportive of remaining accommodative but added that he doesn’t know if the Federal Reserve should commit to keeping rates at zero, as reported by Reuters.
Additional takeaways
“There’s no question unemployment assistance has been vital for those out of work or working insufficient hours.”
“People can power through the resurgence of the virus until local health authorities are overwhelmed.”
“A real downside over next two quarters is if resurgence gets so bad it forces lockdowns.”
“Banks, by and large, have come through current crisis pretty well and he is more worried about the nonbank financial sector.”
“We should be careful about relaxing restrictions on banks until we’re confident we’ve worked way through this.”
“Supporting the idea of keeping fed funds rate where it is as long as we’re fighting the pandemic.”
“My concern is what happens after we’ve weathered the pandemic and the neutral rate drifts up.”
“It is likely there will be more small business bankruptcies by year-end.”
Market reaction
Investors don’t seem to be paying any attention to these remarks. As of writing, the S&P 500 Index was virtually unchanged on the day at 3,550.
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