Fed’s Kaplan: First rate hike seen in 2022

Ross J Burland FXStreet

Federal Reserve's Robert Kaplan sees the first rate hike as being in 2022.

Key comments

2022 inflation seen ‘moderating but broadening’.
2021 PCE inflation seen at 3.4%, 2.4% in 2022.

Earlier in the week, Kaplan said the tilt by Fed policymakers to a faster expected start to interest rate increases was a reaction to an economic outlook that took a sharp turn between December and June,

As of December the path of the coronavirus pandemic remained uncertain, but "when we got to March it was clearer that we were going to get the pandemic under control...By the time we get to June...you've really got a big upgrade” that made the core of officials expect rate increases in 2023 instead of 2024, said Kaplan. "What you are seeing...is monetary policymakers simply reacting to the dramatically improved economic outlook."

There has been no additional reaction in the remarks today in markets.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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