Non voting member Kaplan speaks in Boston
Kaplan adds:
- global growth is decelerating
- Slower global growth will spill over into US growth
- US won't be immune to global growth slowdown
- corporate debt burden could amplify economic weakness
- severity of climate events may start to impact economic performance if they become more frequent
- Fed needs to be open to learning about just how tight the labor market can become before inflation pressures become apparent
- disruption to jobs in US today primarily driven by technology; blaming it on globalization potentially leads to poor policy decisions
- sees Fed policy in the neighborhood of neutral right now
- expects to and year with about 2% inflation, labor market to tighten further
- Watching credit spreads, not the stock market
- Too soon to make judgement on rate cut because of trade tensions, but is concerned that downside risks have increased
- he does think yield curve inversion is significant, but needs to see that it has some size and some duration
