Former Fed Official: Fed is Expected to Cut Interest Rates to Avoid Recession Risk

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Former Dallas Federal Reserve (Fed) President Robert Kaplan said the Fed is expected to begin cutting interest rates soon to avoid the risk of the U.S. economy slipping into recession.

Key Quotes

One of the reasons the U.S. economy has gotten into inflationary problems is that the Fed has been too accommodative for a long time, even when the economy was improving, and I don’t think the Fed wants to make the reverse mistake of keeping restrictions too tight.

As the economy and inflation recede, the Fed doesn’t want to make the opposite mistake.

Market Reaction

The comments above had little impact on the dollar. As of press time, the U.S. dollar index rose 0.06% to 101.50.