Fed should reduce accommodation to fight 'excesses': Kaplan

Dallas Federal Reserve Bank President Robert Kaplan gestures during a news conference after of the True Economic Talks event in Mexico City, Mexico, July 14, 2017. REUTERS/Edgard Garrido

FRANKFURT (Reuters) - The Federal Reserve should gradually reduce its accommodation as an overly tight labor market raises the risk of “excesses” building up in the economy, Dallas Fed President Robert S Kaplan said in Frankfurt on Wednesday.

“If you have significant enough overshoot of full employment, history shows that usually other excesses and imbalances build,” Kaplan, a non-voting member of the Fed’s policy committee, told an event.

“It’d be wise for us to be removing accommodation, although in a patient and gradual manner.”

Reporting By Francesco Canepa; Editing by Balazs Koranyi