Dudley and Kaplan on a development panel

Dudley:

  • Policy challenges include taxes, immigration, trade
  • A less-complex system would be a good start
  • No reason why the expansion has to die of old age
  • A less-complex tax system may boost productivity
  • It's a puzzle why pricing power is weak but profit margins high
  • US operating in a pretty tight labor market
  • Hasn't incorporated tax reform into his forecast
  • 'We're a long way from tax reform at this point'
  • Stimulus oriented tax bill would be 'ill timed'
  • Investors aren't paying enough attention to government debt servicing cost
  • Dollar is neutral for US inflation outlook

Kaplan:

  • Underpinning of US growth is very solid
  • Infrastructure underinvested by about $3 trillion, $1 trillion could come from private sector
  • Worries about tax cut that could lead to long-term debt load, which would harm future growth
  • Says he's wary of pushing rates up to 10-year yields