Dallas Fed President Robert Kaplan said in a Bloomberg interview that he favored pausing the rate hike cycle until the uncertainties are cleared. He pointed to concerns over global growth, weakness in interest-sensitive industries and tighter financial conditions and warned “there’s three big issues that I see reflected in the markets that are consistent with what I’m seeing in the economy and discussions with contacts.”
He added that “I think those three issues — I’m sure — are affecting the markets, but they’re also affecting my thinking about monetary policy. It’s going to take some time so see the depth and breadth of those three issues.”
Thus he said, “my own view is we should not take any further action on interest rates until these issues are resolved, for better, for worse.” And, “I would be an advocate of taking no action and — for example — in the first couple of quarters this year, if you asked me my base case, my base case would be take no action at all.”
