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"Too early" to settle the judgment



Federal Reserve Bank of Dallas President Robert Kaplan said on Monday that it might be "too early to take a stand" on whether the central bank should lower rates.

In an essay released Monday afternoon, Kaplan wrote that increased trade tensions and slower global growth have increased risks for the US economy, but the aforementioned things may change in the near future.

"In this situation, I think it would be wise to let events unfold a little more before they judge monetary policy," Kaplan wrote. Kaplan is not a voting member of this year's Federal Open Market Committee.

Kaplan painted a positive image of the US economy and said that the country is in a pace for a "solid" DG growth in 2019 and that the labor market is "on or before full employment." Fed politicians have struggled with its 2 % inflation target, but Kaplan said the Dallas Fed's "trimmed mean" metric – an alternative target for core inflation – has Fed drive of about 2%.

Kaplan said politicians should be cautious about giving more monetary housing and warn that it can build leverage in the financial system. Over the past few months, economists have been watching for leveraged loans, the big corporate market that became popular as prices were almost zero.

"I think we are currently near a neutral stance on monetary policy – that is, we are probably not accommodating or limiting," Kaplan wrote.

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) type =" text "content =" In Fed's June 19 meeting, Fed & nbsp; rates unchanged & nbsp; in the target range from 2.25% to 2.5%, but eight out of 17 politicians estimated at least one rate cut The markets have perceived that as a sign of an upcoming interest rate cut and Fed funds futures contracts are currently pricing in a 100% chance for a cut at the end of the Fed's July 31 meeting. "data-response time =" 28 "> In the Fed's June 19 meeting, the Fed kept the target area unchanged at 2.25% to 2.5%, but eight out of 17 politicians had expected at least one reduction at the end of Markets have perceived that, as a sign of an upcoming interest rate cut, Fed funds futures contracts are currently pricing at a 100% chance of a cut at the end of the Fed's July 31 meeting.

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " With additional time " data response = "29"> Takes extra time

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Kaplan's comments come at the heels of a manufacturing survey from his own district, showing that businesses are becoming more nervous about where the economy is heading. Investigation data released Monday morning reported that companies in Texas – the country's largest exporter – have the gloomiest view of the economy in three years and have held back on investment spending. "data-response time =" 30 "> Kaplan's comments come at the heels of a manufacturing study from its own district showing that businesses are becoming more nervous about where the economy is heading. Research data released Monday morning reported that companies in Texas – biggest exporter – has the most incredible outlook for the economy in three years and has held back on investment spending.

Reason? Rates Several respondents to the Dallas Fed survey report a decrease in profit margins due to tariffs, explaining the darker outlook and buybacks

But Kaplan seemed to suggest that these trade tensions could be reduced, and all eyes are on the G20 in Japan this weekend, where President Donald Trump is scheduled to meet with Chinese President Xi Jinping.

Kaplan said that the increased trade tensions weigh negatively on companies, but said a decision would halt Inner these headwinds from leading to lasting effects on the economy. He wrote on Monday that he would be "very vigilant" to indicate that trade or domestic data is being wasted "in a significant deterioration of the economy's outlook."

"Meanwhile, I think it would be wise to take extra time and allow events to unfold when we consider whether it is appropriate to make changes to the attitude of US monetary policy," Kaplan wrote.

<p class = "canvas-textile text Mb (1.0em) Mb (0) – -m Mt (0.8em) – sm" type = "text" content = " Brian Cheung is a reporter covering The banking sector and the finance and policy intersection of Yahoo Finance. You can follow him on Twitter [19659015] @ bcheungz . "data-response time =" 35 "> Brian Cheung is a reporter covering the banking sector and the intersection of economy and politics of Yahoo Finance. You can follow him on Twitter @ bcheungz .

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