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The U.S. economy will likely meet the Federal Reserveâs threshold for tapering its asset purchases sooner than people think, said Dallas Fed President Robert Kaplan, who has penciled in an interest-rate increase next year.
âAs we make substantial further progress, which I think will happen sooner than people expect â sooner rather than later â and weâre weathering the pandemic, I think weâd be far better off, from a risk-management point of view, beginning to adjust these purchases of Treasuries and mortgage-backed securities,â Kaplan said Wednesday in an interview with Bloomberg News.
Kaplan says heâs forecasting rate liftoff in 2022 from its current setting near zero, as inflation surpasses the central bankâs 2% goal this year and next and unemployment dips below 4%. He declined to elaborate on his 2023 rate projection.