Fed’s Kaplan says fiscal stimulus waning, rate hikes to bite

DALLAS (Reuters) – Fiscal stimulus from tax cuts and a government spending bill are beginning to wane, and the lagged effect of a string of interest rate hikes has yet to fully impact the U.S. economy, Dallas Fed President Robert Kaplan said on Thursday, two reasons why he says he is advocating a stop to rate hikes for now.

Slowing global growth that could spill over to the U.S. economy, tighter financial conditions than six months ago, and the probability that last year’s tax cuts will not boost productivity as hoped, all contribute to his view that the U.S. economy will grow just 2 percent this year, he said.

“We would be well served and the country would be well served if we paused and were patient for some number of months and sort of get out of the way,” Kaplan said at a conference at the bank’s headquarters in Dallas.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.