Former Dallas Federal Reserve President Kaplan expects FOMC interest rate cuts in 2024

<p>Kaplan was speaking in a US media interview on his outlook for the US economy and Federal Reserve monetary policy. </p><p>He expects the FOMC will leave Fed Funds unchanged at the September meeting (on the 19th and 20th). As for rate cuts on the way:</p><ul><li>I think an estimate that by the middle of next year, they’ll feel that it’s appropriate to cut rates isn’t unreasonable</li><li>I don’t know if it’ll turn out that way. But that’s as good as expectation is any I think at this point</li></ul><p>

Kaplan added, though, that fiscal developments could see the Fed hold rates higher for longer, saying high levels of government spending will put pressure on bond yields</p><ul><li>That’s the ‘x’ factor that’s hard for me to gauge</li></ul><p>Kaplan got himself in trouble with his trading activities whilst head of the Dallas Fed, and resigned. As far as his economic outlook goes though, he was a lone and early voice warning that inflation was not transitory and the Fed should cut back on easing. No one around the FOMC table listened to him. Which was a shame, the FOMC eventually, finally, had to raise rates to combat the CPI surge. Over and over again. </p>

This article was written by Eamonn Sheridan at www.forexlive.com.