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"I
would advocate that we take action to remove some amounts of
accommodation," Kaplan said in remarks prepared for delivery in
New York. Kaplan, who will vote on the Fed's policy panel for
the first time next year, said rate rises should be made
"gradually and patiently."
The Fed next meets in December, and traders see about a nine in
10 chance that policymakers will raise rates then.
Since the Nov. 8 surprise election of Republican Donald Trump as
U.S. president, stocks and Treasury yields have soared as
investors anticipate economic stimulus in the way of
infrastructure spending, tax cuts and fewer regulations on
businesses.
While avoiding any mention of the president-elect, Kaplan
appeared to endorse many of his policies, suggesting they offer
a way out of the pattern of slow growth that has marked the last
eight years.
"Public investments that upgrade aging infrastructure could
potentially improve productivity and help bolster sluggish
demand," Kaplan said, adding that a meaningful amount of such
investment could come from public-private partnerships, an
approach that Trump has said he favors.
"More broadly, tax reform and regulatory policies could be
considered in order to create increased incentives for growth
and investment, which might ultimately improve future rates of
GDP growth," Kaplan said.
Improvements to education and reform of entitlements like
Medicare and Social Security are also routes to stronger
economic growth, he said.
Kaplan even offered some support for what may be one of Trump's
most controversial policies, at least among economists: his call
to rewrite some trade deals to give U.S. workers a fairer shake.
Comprehensive trade reform, Kaplan said, "could create a more
level global playing field for the movement of goods and
services."
Kaplan also used his remarks to put in a plug for one economic
policy that Trump has not supported: an immigration policy to
help boost the workforce, which otherwise is under pressure
because of the aging U.S. population.
(Reporting by Ann Saphir; Editing by Leslie Adler)
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