Fed's Kaplan says low 10
Robert Kaplan
PALO ALTO  Calif. (Reuters) -  Dallas Federal Reserve Bank President Robert Kaplan  said on Tuesday  he  wants to see more signs of upward inflation before raising interest rates again  but that low long-term borrowing costs may limit how far and fast rates can be raised.
The Fed has raised rates twice this year  and is widely expected to do so again in December. But even as the short-term interest rate targeted by the Fed has climbed  the yield on the benchmark 10-year Treasury has fallen  a reversal of what usually happens and a development that  Kaplan  said  he  sees as âa little ominous.â
âI view that as a comment on future economic growth â  Kaplan  said at the Stanford Institute for Economic Policy Research. âAnd what I donât want to see us do is raise rates so fast that we get an inverted yield curve because history has shown an inverted yield curve has tended to be a precursor to a recession. â
Kaplan  who votes this year on Fed policy   appeared on Tuesday to be wrestling with how to balance the costs of leaving rates low against the potential dangers of raising rates too fast.  He  repeated  his  concern that globalization and technology are keeping inflation muted  despite unemployment that sank in September to 4.2 percent.
While near-full employment is putting some upward pressure on inflation   he  said on Wednesday  those secular forces are acting as headwinds.
âIâll be looking for evidence that we are making progress or likely to make progress over the medium term in reaching our 2-percent (inflation) target â  Kaplan  told reporters after the event.
Asked by a reporter what he thinks of former Fed Governor Kevin Warsh   Kaplan  said  he  believes disagreement at the Fed is healthy.
âI think very highly of Kevin â  Kaplan  said. â He  and I may disagree on some things. I think thatâs a good thing....I am confident that a good decision will be made and the Fed will operate very effectively in the future  including if itâs Janet Yellen  who I think has done an outstanding job.â
PALO ALTO  Calif. (Reuters) -   [TGT] said on Tuesday   [TGT]   wants to see more signs of upward inflation before raising interest rates again  but that low long-term borrowing costs may limit how far and fast rates can be raised.
The Fed has raised rates twice this year  and is widely expected to do so again in December. But even as the short-term interest rate targeted by the Fed has climbed  the yield on the benchmark 10-year Treasury has fallen  a reversal of what usually happens and a development that   [TGT]   said  he  sees as âa little ominous.â
âI view that as a comment on future economic growth â   [TGT] said at the Stanford Institute for Economic Policy Research. âAnd what I donât want to see us do is raise rates so fast that we get an inverted yield curve because history has shown an inverted yield curve has tended to be a precursor to a recession. â
 [TGT] who votes this year on Fed policy   appeared on Tuesday to be wrestling with how to balance the costs of leaving rates low against the potential dangers of raising rates too fast.   [TGT]   repeated   [TGT]   concern that globalization and technology are keeping inflation muted  despite unemployment that sank in September to 4.2 percent.
While near-full employment is putting some upward pressure on inflation    [TGT]   said on Wednesday  those secular forces are acting as headwinds.
âIâll be looking for evidence that we are making progress or likely to make progress over the medium term in reaching our 2-percent (inflation) target â   [TGT]   told reporters after the event.
Asked by a reporter what he thinks of former Fed Governor Kevin Warsh    [TGT] said   [TGT]   believes disagreement at the Fed is healthy.
âI think very highly of Kevin â   [TGT] said. â He  and I may disagree on some things. I think thatâs a good thing....I am confident that a good decision will be made and the Fed will operate very effectively in the future  including if itâs Janet Yellen  who I think has done an outstanding job.â