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Fed's Kaplan watching Delta variant, says he may need to adjust view

EconomyAug 20, 2021 01:05PM ET
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© Reuters. FILE PHOTO: Dallas Federal Reserve Bank President, Robert Kaplan, stands on a stage at Stanford UniversityÕs Hoover Institution where he is attending an annual monetary policy conference in Stanford, California, U.S., May 4, 2018. REUTERS/Ann Saphir

(Reuters) -Dallas Federal Reserve President Robert Kaplan, among the U.S. central bank's most forceful supporters for starting to reduce support for the economy, said on Friday he may need to adjust that view if the Delta variant of the coronavirus slows economic growth materially.

"It's unfolding rapidly," Kaplan said on Fox Business Network's "Mornings with Maria" program.

"So far, it's not having a material effect" on consumer activity like dining out, he said, but "it is having an effect in delaying return to office, it's affecting the ability to hire workers because of fear of infection," and may be affecting production output, he said.

In a separate virtual appearance at a Texas Tech University event, Kaplan said he was for now leaving his economic forecasts unchanged, at 6.5% GDP growth for this year, with unemployment falling to around 4.5% by the end of 2021, a view he's had for many months now.

Inflation as measured by a key Fed gauge, the personal consumption expenditures index, will likely be around 3.8% at year's but ease next year to about 2.5%, still above the Fed's 2% target, he said.

If the economy plays out as he expects, he said, he'd still support announcing a reduction in the Fed's $120 billion in monthly asset purchases next month, and begin actually doing so in October.

The caveat, he said, is the highly contagious Delta variant.

It's "a good thing" there's still a month to watch it before the Fed's next policy-setting meeting, he said.

Fed's Kaplan watching Delta variant, says he may need to adjust view
 

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Comments (7)
Abdurrahman Peter Lauridsen
Abdurrahman Peter Lauridsen Aug 20, 2021 1:27PM ET
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They are all liers and criminals
David TP
David TP Aug 20, 2021 1:27PM ET
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who are they ????
Millennial Metals
Millennial Metals Aug 20, 2021 1:11PM ET
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Every single one of these fed chairs deserves the gu i llotine
MK MK
MK MK Aug 20, 2021 12:24PM ET
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Silly bustards cannot understand that best help for real economy it to stop printing and cool markets to bring prices down
David TP
David TP Aug 20, 2021 12:24PM ET
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its not the stock market prices , its the prices in the stores ........
Michael Angelo
Michael Angelo Aug 20, 2021 11:51AM ET
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Does the "experts" have any idea other than repeat all news or this is just to move markets. Because if so they are proving their uselessness.
Abdul Rehman
Abdul Rehman Aug 20, 2021 11:51AM ET
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All these puppet policy makers corrupt and sold. US under seige from big companies.
Frank Francone
Frank Francone Aug 20, 2021 11:48AM ET
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Covid = super bullish for economy
Larry Langley
Larry Langley Aug 20, 2021 9:41AM ET
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These guys jobs are not to talk to the public. Do their reports and shut up. Same with the 200+ that rate stocks. WTH do they know. Not their place to comment and letter grade, no price stamp, or constantly changing. All of this is lack of ethics and never was part of the system. All to herd like sheep.
Edward Chong
Edward Chong Aug 20, 2021 9:33AM ET
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wow this guy really can change his words overnight.
 
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