- Kaplan says, ‘should not overreact to single data report.’
- ‘2 rate cuts this year reduce likelihood of severe slowdown, but doesn’t eliminate risk.’
Following the recent US data from where both key ISM surveys have pointed to a major slowdown in US growth rates, sending stocks lower and encouraging the likelihood of further action fro the Federal Reserve, Robert Kaplan, president of the Federal Reserve Bank of Dallas has crossed the wires again and has said that they are watching services sector ‘extremely carefully’.
Further comments:
- Should not overreact to single data report.
- 2 rate cuts this year reduce likelihood of severe slowdown, but doesn’t eliminate risk.
- A lot of businesses are putting things on hold amid trade uncertainty.
- Strong consumer, tight labour market underpinning US economy.
- Time will tell if rate cuts have gone far enough.
- From risk management point of view, ‘more inclined to take action sooner, if necessary’.
- If wait until weakness in broader economy is manifest, will have waited too long.
Earlier comments from Kaplan:
“The Federal Reserve is allowing the economy to run hotter; the job market is tight but inflation is not running away,” Kaplan noted.
Additional reading:
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Fed has more work to do to support the economy – ING
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