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Dallas Fed president supports winding down stimulus when coronavirus crisis eases
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Dallas Federal Reserve President Robert Kaplan said on Thursday he sees no need to expand the central bank’s asset purchases to bolster the economic recovery and instead signaled support for winding stimulus down when the coronavirus crisis eases.
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“I’d be skeptical about the benefits of doing more,” Kaplan told Bloomberg Radio. Long-term interest rates are already low, and trying to push them down further by adding to the $120 billion in bonds the Fed is already purchasing each month would do little to help the real economy.
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Kaplan added “the bond-buying needs to curtail, the Fed balance sheet growth needs to curtail,” when the crisis starts to lapse.
“I don’t think it’s healthy for the markets to be addicted, or too reliant, on Fed presence … it engenders fragilities.”