Fed's Kaplan: Taper of Fed's bond purchases should start soon and be gradual

In an interview with Reuters on Wednesday, Dallas Fed President Robert Kaplan argued that the taper of the Fed's bond purchases should start soon and be gradual.

Additional takeaways

"Questioning efficacy of Ded's asset-purchase program; won't speed labor market matching process."

"Reducing Fed's asset purchases soon gives it flexibility to be patient on interest rate hikes."

"Faster taper does not mean Fed will raise rates faster."

"It is critical to divorce decision on taper from decision on rates."

"Gradual taper could mean trimming monthly purchases of treasuries by $10 billion, mortgage-backed securities by $5 billion."

"Seeing taper taking about eight months."

"Delta variant of coronavirus could slow job gains but won't slow recovery unless vaccines prove less effective in preventing hospitalizations, deaths."

"Will reassess next month his own view from June that 2022 interest rate hike would be appropriate."

Market reaction

The US Dollar Index stays in the positive territory following these comments and was last seen gaining 0.2% at 92.25.