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"I
am closely monitoring how slowing growth, high levels of
overcapacity and high levels of debt to GDP in major economies
outside the U.S. might be impacting economic conditions in the
U.S.," Kaplan, a centrist at the U.S. central bank, said in
remarks prepared for delivery at an event in Beijing.
In his second appearance within a week, Kaplan repeated that he
continues to back tightening monetary policy in a gradual and
patient manner.
Kaplan, along with several other Fed policymakers, has urged
renewed caution in trying to lift rates again since the U.S.
central bank raised its benchmark interest rate for the first
time in almost a decade last December.
Chief among his concerns is sluggish U.S. growth exacerbated by
a changing world in which economies are more globally
interconnected.
Kaplan warned that China's debt growth "may prove to be
unsustainable," and that as its growth continues to slow the Fed
"will continue to carefully monitor the potential spillover
effects on currencies as well as global financial conditions."
The Dallas Fed chief, who is not a voting member on Fed policy
this year but participates fully in deliberations, also said he
would continue to monitor and assess the implications of
Britain's vote to leave the European Union.
While the so-called Brexit vote has had little initial impact on
the U.S. economy, Kaplan said it would take time before its
ultimate effects on Britain, Europe and the rest of the world
became clear.
Kaplan's comments make him the second policymaker this week to
strike a modestly downbeat note on the Fed's ability to raise
rates soon.
On Monday New York Fed President William Dudley, a permanent
voter on the Fed's rate-setting committee, said that while it
was "premature" to rule out a rate increase this year, negative
economic shocks were more likely than positive ones.
Investors have curbed bets that the Fed will raise rates again
in 2016. They currently see a one in three chance the central
bank will raise rates at its December meeting, according to the
CME Group.
The Fed still projects two more rate rises by the end of the
year but has been stymied since December by a changing backdrop
of global uncertainty and periodically disappointing U.S.
economic data.
The Fed's next policy meeting is on Sept. 20-21.
(Reporting by Lindsay Dunsmuir; Editing by Leslie Adler)
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