Ka­plan Coun­sels Pa­tience With Growth Seen Slow­ing

The Bond Buyer - - Market News -

Fed­eral Re­serve Bank of Dal­las Pres­i­dent Robert Ka­plan said that he’ll be coun­sel­ing pa­tience as the cen­tral bank moves into 2019 against a back­drop of slow­ing growth and no sign that in­fla­tion is tak­ing off.

“I’ve had a lot of con­fi­dence that we should be mov­ing along” but “at this stage, you’re go­ing to hear me be a lot more cau­tious and coun­sel pa­tience,” Ka­plan said in an in­ter­view Thurs­day on CNBC. “Nor­mal­iz­ing mon­e­tary pol­icy was al­ways go­ing to be chal­leng­ing, and I think we’re in the stage of this process where you’re go­ing to hear me shorten up on prog­nos­ti­ca­tions.”

“We ought to be very grad­ual and pa­tient here, in­fla­tion — in my judg­ment — isn’t run­ning away from us,” Ka­plan said when asked if mar­kets were over­pric­ing a com­ing rate in­crease at the Dec. 18-19 meet­ing of the Fed­eral Open Mar­ket Com­mit­tee. Fed­eral funds fu­tures pric­ing in­di­cates a hike is nearly 70% priced in, though that’s been headed lower in re­cent days.

Ka­plan said he wouldn’t com­ment on mar­ket pric­ing and was “not go­ing to judge or pre-pre­dict what we’re go­ing to do” but re­it­er­ated that “we ought to be pa­tient.”

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