The chairman of the Dallas Federal Reserve, Robert Kaplan, gave an interview to the Bloomberg chain in which he referred to several topics. He indicated that the coming quarters will be very difficult and that negative interest rates are being ruled out for now.
Regarding the economic outlook, Kaplan stated that “You have to spend the next two quarters”. You wouldn’t be surprised to see more fiscal stimulus and warned of the problems that no new ones can bring.
“I’m still hopeful that in the spring, with the vaccine, we will see a better economy,” Kaplan said. Clarified that downside risks increased with the resurgence of the coronavirus, although he defined himself optimistic in the long term.
The official’s expectations are that potential GDP growth after 2023 will again be slow.
On monetary policy, Kaplan said that financial conditions are relatively lax. Talks about a phasing out stimulus program will be after the pandemic is over.
Consulted for the possibility of negative interest rates, indicated that this discussion is not on the Fed’s table. In the opposite direction, he indicated that if inflation rises rapidly, they should take more aggressive actions.
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Credits: Forex Street
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