Kaplan Thinks its Time for Fed to Pull Back on Easing Policies

Dallas Fed President Robert Kaplan believe it’s time for the central bank to pull back on its aggressive easing policies.

In a CNBC interview, Kaplan said the Fed should move “sooner rather than later,” a phrase he has been using in recent days to indicate that rate hikes this year are appropriate.

“I actually think we’re now much closer to meeting our employment and inflation objectives,” he said in a live interview. “Once you’ve decided that, you need to take advantage of those windows when they present themselves.”

Recent days have seen the market start to price in a higher probability that the Fed will hike in March. While some measures indicate a 50 percent chance of a move, the CME’s tracker puts the possibility closer to 31 percent.

Kaplan said he believes market-based measures are probably close to correct, though he didn’t nail down a specific moment for an increase.

“I don’t think the exact timing is the most important thing. I think the path of rates is,” he said. “In that regard I think the market is probably in the neighborhood of where we’re heading.”

via CNBC

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