Expect Fed Rate Hikes to Continue This Year, Says Kaplan

The U.S. Federal Reserve will gradually adjust their current accommodative monetary policy and push through the planned three rate hikes in 2018, according to the Dallas Fed President Robert S. Kaplan in a business conference in Frankfurt on Thursday.

He said that volatility in the market is not sufficient to shift the situation. Notwithstanding, there are still cautious on the disturbance and they will examine its actual effect on the economy.

At present, there is no market adjustment that has largely affected the financial market but he will still be keen on it, he commented to the reporters. Moreover, he clearly said that his position did not change in this regard.

Last year, the Federal Reserve raised their interest rate from the previous revision of 0.25 points in December.

There was a selloff in the stock market, which raises concern about inflation that would prompt the Federal Reserve to be tighter with their policies at a faster rate. This has caused panic and the market but the statements of Kaplan has somehow toned down the market, saying that stimulus would be executed gradually and patiently without any particular rates at the moment.

Considering the rapid growth and low unemployment rate as a major catalyst for policy tightening.  Kaplan forecasted that jobless rates could decline below 4 percent in 2018, which has exceeded the estimated value for full employment.

As a whole, he said that growth will probably gain momentum this year and get slower the year in the next two years.

Lastly, he commented that “2018 will be a strong year in the United States”. They have almost reached the full employment figure in the U.S. The headline unemployment is anticipated to drop lower than 4 percent this year.