Fed's Kaplan: Fed reserve management has some effect on risk assets
Kaplan on the balance sheet:
- Sensitive from here to seek ways to limit balance sheet
- I'm worried about impact of Fed policy on asset prices
- Anything that curbs uncertainty will help investment, but even so business spending will still be sluggish
- Phase-one trade deal is positive and creates some stability
- Consumer is solid, jobs market is tight
The Fed faces some kind of reckoning about it's "non-QE" balance sheet expansion. It's clear that a few members don't like the implication that's it's goosing equities.