If Robert Kaplan still had a say in the matter, he would push for a half-percentage point rate cut at this week’s Fed meeting.
The former Dallas Fed president told CNBC on Tuesday, A bolder 50 basis point rate hike will better position policymakers for economic challenges in the second half of this year and beyond.
“If I were sitting at the table, I would advocate for 50 people in this meeting,” Kaplan said at one meeting.scream box“Interview. “I think the Fed will probably meet a little later, and if I had it to do over again, I would probably prefer that we start cutting rates in July rather than September.
The market currently sees a roughly 2-to-1 chance of the FOMC approving a 50 basis point rate cut, rather than Cut interest rates by 25 basis points As of Friday, the price had been pricing in Fed Watch. 1 basis point equals 0.01%.
The federal funds rate, the central bank’s benchmark overnight lending rate, currently ranges from 5.25% to 5.50%.
Kaplan said he would chair the committee if it decided to take more drastic steps Jerome Powell Further cuts in the future “will likely be more cautious,” he said at a post-meeting press conference on Wednesday. The Federal Reserve’s two-day policy meeting begins on Tuesday.
“From a risk management perspective, 50 makes the most sense,” Kaplan said. “If there’s a split in the team, really, a lot will depend on what Jay Powell personally thinks, what his personal preference is on all this, and his ability to convince everyone to come to a unanimous decision.”
Kaplan served as chairman of the Federal Reserve Bank of Dallas from 2015-21 and is now a managing director at Goldman Sachs.
