Dallas Fed President Robert Kaplan said Fed officials are watching whether “decelerating global growth”, “weak manufacturing” and “weak business fixed investment” in the US would spreads through the rest of the economy. He added that if it spreads enough so that in six months there were a weak job report or two, “all of a sudden consumer confidence gets a little shaky, then you could have the start of a more severe downturn”.
And that’s why Fed lowered interest rate twice to a “little accommodative” level to support spending and investment and guard against a slowdown. He’s still comfortable that US is “not going to have a recession”, as long as consumers stay strong. At this point, Kaplan is “agnostic” about whether further rate cuts will be needed.
