Dallas Fed President Robert Kaplan hailed Fed’s emergency rate cut this week to counter the impact of coronavirus epidemic. He told Chicago Council on Global Affairs “it’s wise to act sooner, more boldly, and it increases the likelihood that we’ll need to use less policy ammunition” later on.
Separately, he told Bloomberg, “a week is an eternity”, regarding what Fed would do in the upcoming March meeting. “I am going to be watching very, very carefully the path of diagnosed cases,” Kaplan said. “We’re just going to have to see what the actual developments are over the next 10 days, two weeks. That will be a key factor, yes, I will be using to judge what’s appropriate and whether we can wait longer.”
Minneapolis Fed President Neel Kashkari also said it was “prudent” for Fed’s -50bps rate cut. He added, “this was insurance that we took out because nobody knows how bad the virus is going to be. If everybody pulls back at the same time, that in itself can lead to a recession,” he added.
