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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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza