Kaplan interview with Reuters:
- Fed has not downgraded forecasts but needs to understand the effects on US
- It's 'significant' that the Fed removed the reference to 'balanced' risks in the statement
- There's good reason to be patient on rates given that financial conditions have tightened
- We are mindful that BOJ stimulus will clearly have an affect on the dollar
- Says Fed not locked into 3 or 4 hikes this year
- Does not predict number of hikes
- China policy moves appear 'clumsy' over past 6 weeks
- Many challenge spots globally, including China
- Overseas challenges will affect US
- Widening of high-yield spreads 'gets my attention'
Dovish stuff from Kaplan as the Fed begins The Great Climbdown. It's like they've finally seen headwinds that everyone warned them about but in December they were so fixated on that first hike that they missed all the signals.
