Exclusive: Fed's Kaplan Says It's Time To Raise Rates
Federal Reserve Chair Janet Yellen said an interest-rate hike could come â€œrelatively soonâ€ her remarks came during her testimony before the Joint Economic Committee on Thursday. Today Dallas Federal Reserve Bank President Robert Kaplan echoed her outlook.
â€œI think we are ready to remove some amount of accommodation in the near future. I usually donâ€™t comment on individual meetings but Iâ€™ve been saying for the last couple of months we are ready to remove some amount of accommodation and I still feel that way heading into December,â€ he told the FOX Business Networkâ€™s Peter Barnes in an exclusive interview.
He also said if fiscal policies help improve growth the Fed will have more leeway in 2017.
â€œI think we need policies beyond monetary policy. We need infrastructure spending, other economic policies, structural reformsâ€¦ I think if they are things that actually help improve the path of growth and improve employment then I think it will give us a little more operating room as we head into 2017,â€ he said.
However he is concerned that the U.S. economy is not growing fast enough.
â€œGDP growth has been sluggish. Itâ€™s been sluggish since the great recession. There [are] some good reasons for that. One is the housing sector has been deleveraged, but the other big reason is aging demographics. The workforce is aging which is reducing participation,â€ he said adding that it would take â€œbroader economic policyâ€ to address this issue.
When asked about the overall health of the economy he said: â€œI donâ€™t think we are in recession and I donâ€™t see a recession comingâ€¦ The reason is the consumer in the United States is strong. We spent 8 years with the consumer deleveraging. The consumer is over 70% of the economy. The consumer balance sheet debt to income is in pretty good shape.â€
Robert Kaplan will become a voting member of the FOMC in January 2017.