Fed's Kaplan: It will take a while for inflation to get back to 2%

Author: Adam Button | Category: News

Comments from Kaplan on Bloomberg TV

  • Technology-enabled disruption is putting downward pressure on prices
  • Fed needs to be conscious of financial stability and excesses that could exist as a result of their policies
  • I don't view average inflation targeting as a radical change, it's an affirmation of how we've been operating for some time
  • Says he would prefer to wait for more clarity on the path of the virus before Fed gives more forward guidance
  • I, for one, will not take higher inflation lightly
  • I think it's very important that we indicate that the pandemic programs will lapse
  • I'm particularly concerned about debt buildup
  • Thinks unemployment will end the year near 8% unless there is a greater resurgence of the virus
  • I would prefer to wait on the path of virus before giving more forward guidance
  • I would prefer to show some restraint here, I think we've done quite a bit
  • The dynamics of inflation may well change so 3.5% unemployment may no longer be the low. My approach will be to give the labor market every opportunity to get back to that level
These comments from Kaplan are on the hawkish side, at least relative to this FOMC.

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