Comments from Dallas Fed President Kaplan

Kaplan has made the forecast before.

Update:

  • The largest disagreement at Fed is about how quickly to hike rates
  • Still some slack in the jobs market
  • His forecast for three rate hikes approximates his view
  • Must remember deficit issue when mulling fiscal policy

USD talk

  • Stronger dollar will create headwinds for exports
  • Fed should probably debate balance sheet in 2017
  • Initial focus should be on rate hikes
  • Will 'wait and see' for effects on Obamacare
  • He's hopeful for 2017

This is basically the baseline at the Fed. There's some optimism and they think they will hike but want to get more confidence.

The intrigue in this year might be the balance sheet and ending re-investment would really push up yields.