Fed’s Kaplan rejects adding to bond buys, nods to future taper

Fed’s Kaplan rejects adding to bond buys, nods to future taper

© Reuters. Dallas Federal Reserve Bank President Robert Kaplan gestures during a news conference after of the True Economic Talks event in Mexico City

(Reuters) – Dallas Federal Reserve President Robert Kaplan on Thursday said he sees no need for the Fed to bump up its asset purchases and signaled he would support paring those purchases as the coronavirus crisis starts to recede.

“We are already buying a significant amount of bonds as it is, and I’d be skeptical of doing more myself,” Kaplan told Bloomberg Radio, saying that with long-term interest rates already low, there is little chance more bond purchases could help the real economy.

“When the crisis starts to lapse and we’ve weathered it, I personally would be an advocate of withdrawing these programs, the 13-3 programs need to lapse, the bond-buying needs to curtail, the Fed balance sheet growth needs to curtail. I don’t think it’s healthy for the markets to be addicted, or too reliant, on Fed presence … it engenders fragilities.”

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