EL PASO, Texas (Reuters) - Federal Reserve Bank of Dallas President Robert Kaplan said on Tuesday that he is comfortable with one more U.S. interest-rate hike this year, and his base case is for two more next year - but that could change if he sees signs economic growth needs to be restrained.
The Fed last week raised interest rates for a third time this year to a range of 2 percent to 2.25 percent. With “neutral” in Kaplan’s view at between 2.5 percent and 2.75 percent, “mathematically there’s at least a couple more increases to get to that level,” he told reporters after a talk here.
“We’ll have to see if it’s appropriate to do more. I’ll make that judgment as we go; I haven’t decided yet.” Kaplan said he is not advocating for a “pause” in rate hikes, but rather a careful look at the yield curve, the outlook for GDP growth, and labor slack.
“We should be moving toward a neutral stance, and at that point we should be assessing where we should go from there – not a pause – I don’t know that I would agree with a pause, I’m not advocating a pause.”
Reporting by Ann Saphir; Editing by Chizu Nomiyama