Fed's Kaplan: May be late to act when consumer is hit

Wednesday, 04. September 2019 16:53

Speaking on Wednesday at the Toronto Global Forum, the president of the Federal Reserve's subsidiary in Dallas attributed the suffering registered in manufacturing activity in the United States to trade uncertainties and, with them, the global slowdown. Robert Kaplan said the effect is "not surprising" and warned that risks to growth are tilted to the downside. The general situation is "mixed" as household expenditure is strong, he asserted and hinted that it "it might be too late" to act when the weakness is spilled over to the consumer.

The central bank "is still a very potent force," the rate-setter claimed. On the flipside, he said the Fed can't handle a downturn by its own.

Kaplan underscored that financing conditions have improved as the entire Treasury yield curve is shifting lower and added that he is closely observing the phenomenon. The US must "dramatically" develop the way people acquire skills together with early childhood literacy and education in total, the policymaker stressed.

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