Dallas Fed president Kaplan on the news wires
- Reiterates tapering should start soon and be gradual
- Taper could take 8 months
- Tapering soon allows for Fed more flexibility on tightening
- he questions the efficacy of the Fed's asset purchase program
- Feels that asset purchases will not speed the labor market matching process
- Faster taper does not mean that the Fed will raise rates faster
- It is critical to divorce decision on taper from decision on rates
- Envisions a treasury taper of US$10 billion per month/US$5 billion in MBS
- Delta variant could slow job gains but it will not slow the recovery unless vaccines prove less effective in preventing hospitalizations and deaths
- He will reassess next month his own view from June that a H2022 interest rate hike would be appropriate
Kaplan is not a voting member until 2023. He is more of a hawk. Although he is not a voter, he still has a voice at FOMC meetings.
Since the FOMC decision last week, the following Fed officials have spoken. I would characterize Clarida's comments today to be moderately hawkish in that he sees taper by December (given his economic forecast).
As for the others, I would bucket the hawks to be:
- Kaplan
- Waller
- Bullard
The doves to be:
- Powell
- Brainard
- Kashkari
