|
"Three rate increases this year...is still a good baseline. If
the economy develops a little more slowly, then we can do less
than that and if the economy is a little stronger, we can do
more than that," Kaplan said in an interview with Bloomberg TV.
The Fed has already raised its benchmark interest rate once this
year, by a quarter percentage point at its last policy meeting
in March.
In deciding when to support future rate rises, the Dallas Fed
chief noted he was closely watching inflation and that even
though it continued to slowly move up, excess capacity in China
and technology-enabled disruption of business were both exerting
downward pressure.
The central bank has raised interest rates at two of its last
three meetings and has already partly turned its attention to
tackling the $4.5 trillion balance sheet it built up to help
spur the economy in the wake of the financial crisis.
Kaplan said that he thought this year could be appropriate to
take action to reduce the size of the Fed's portfolio.
"As soon as later this year or maybe early next year, we should
begin the process of letting the balance sheet roll off," he
said, adding that any plan should be made public at least a
couple of months in advance.
On the size of the reduction, he said the Fed doesn't have an
"exact fix" but "it's going to be bigger than the $800 billion
we used to run."
(Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama)
[© 2017 Thomson Reuters. All rights
reserved.] Copyright 2017 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
|
