The Fed: Feds Kaplan, in interview, says its time to open discussion on tapping brakes on central-bank support for economy

By Greg Robb8 days ago

Dallas Federal Reserve President Robert Kaplan on Tuesday argued again, in an interview with MarketWatch, for beginning a conversation about the central banks taking its foot off the gas in its support for the economy.

Kaplan said he has greater confidence than he had three months ago that the economy is weathering the pandemic and is on track to meet the Feds goals of full employment and price stability.

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The Fed has been buying $120 billion per month of Treasurys and mortgage-backed securities, and has kept interest rates close to zero, in an effort to support the economy.

In December, the Fed said it would continue asset purchases until the economy reached a benchmark of sustained further improvement in meeting its goals of full employment and 2% long-run inflation.

A lot has changed since December, Kaplan said, pointing to strong fiscal policy actions, a relatively swift rollout of vaccines, and improved mobility and engagement of Americans in the economy.

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