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23 Mar 2021 | 12:21

Fed's Kaplan among those expecting first interest rate hike in 2022

(Sharecast News) - The US central bank should start hiking interest rates in 2021, a top Federal Reserve official reiterated on Tuesday. In an interview with CNBC, Dallas Fed boss, Robert Kaplan, said that his forecasts for the American economy had improved meaningfully.

Nevertheless, like Fed chairman, Jerome Powell, at the 17 March Federal Open Market Committee meeting, Kaplan stressed that he first wanted to see "actual evidence" of a strong economy before voting for withdrawing some of monetary policy support.

Kaplan had penciled-in US gross domestic product growth of 6.5% for 2021, alongside inflation of 2.25-2.5%, before the latter settled down in 2022.

At the 17 March FOMC meeting, it was disclosed that three rate-setters in the US were expecting a first hike in 2022 with a fourth expecting two interest rate hikes.

The remaining 14 on the other hand were still anticipating no hikes in 2022.

Indeed, 11 were expecting that would remain the case even in 2023.

The timing of any possible rate hike in 2022, be that early in the year or near the end, remained unknown, both for Kaplan and his colleagues.

To take note of, Kaplan was speaking before an eagerly awaited auction of seven-year Treasuries scheduled for later in the session.

As of 1252 GMT, the yield on the benchmark 10-year US Treasury note was five basis points lower to 1.65%.
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