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Dallas Fed head does not rule out lower interest rates

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Dallas Fed head does not rule out lower interest rates Dallas Fed President Robert Kaplan said he is closely watching the yield curve for signs of further interest rate cuts. «I intend to closely monitor economic development», – he added. […]

Dallas Fed head does not rule out lower interest rates

Dallas Fed President Robert Kaplan said he is closely watching the yield curve for signs of further interest rate cuts.

«I intend to closely monitor economic development», – he added.

To Kaplan, an excessive decline in borrowing costs could lead to imbalances if the trade tensions that slowed global growth and eased U.S. production also mitigate the downside risks for the country’s economy..

«Now it is important not to give in to emotions. I plan to remain vigilant and maintain an unbiased opinion as to whether further action on the federal funds rate is appropriate», – added by Dallas Fed President.

The next meeting of the American regulator will take place in three weeks. Investors and market participants continue to speculate if interest rates will drop for the third time in a year.

Kaplan’s recent remarks did not shed much light on this..  He said that the decision will be made based on signals from the financial market.

Part of the US yield curve is currently negative, with long-term yields below short-term ones, and the Fed policy rate, currently targeting 1.75% and 2.00%, is higher than the yield on 10-year Treasuries. 

«Movements in market-determined rates are in line with fears of economic weakness spreading more widely to other parts of the American economy», – noted Robert Kaplan.

He has no voting rights at the U.S. Central Bank this year, but participates in regular policy meetings..

Dallas Fed head does not rule out lower interest rates