Dallas Fed President Robert Kaplan reiterated his expectation for two for rate hikes this year. And, 2018 is seen a a relatively solid year for growth to him. But Kaplan also noted that it is going to be watching the yield curve “very carefully”. And he won’t “blindly” support rate hikes if yield curve keeps flattening.
In addition, like other Fed officials, Kaplan said it’s “too early to judge” how the trade spat between the US and China is going to affect the economy. But he warned that if the rhetoric goes on for long enough at this level, it is “having somewhat a chilling effect”.
He added that “I’m still hopeful when we look back a year or two from now you’ll see very little actually done in the way of tariffs that were implemented”. And, “that would be my base case, and I think we are in the early innings of this.”
