Fed's Kaplan continues to make comments
Nothing new and stating basically what we already know, Fed's Kaplan is warning that:
- A real downside risk over the next two quarters is if resurgence gets so bad it forces lockdowns
- People can power through resurgence of the virus until local health authorities are overwhelmed
Again comments are in line with common sense but also a potential reality.
Even more:
- his concern is what happens after we've weathered the pandemic and the neutral rate drifts up
- he is supportive of remaining accommodative but doesn't know if the Fed should commit to keeping rates at 0
- it is likely there will be more small business bankruptcies by year-end
