Fed's Kaplan says he supported rate cut only if Fed signaled nothing further

FILE PHOTO: Dallas Federal Reserve Bank President Robert Kaplan speaks at the Commonwealth Club in San Francisco, U.S., October 11, 2019. REUTERS/Ann Saphir

HOUSTON (Reuters) - Dallas Federal Reserve Bank President Robert Kaplan said on Friday he went along with the U.S. central bank’s rate cut this week contingent on the Fed signaling that no further decreases to borrowing costs were likely, barring a material change in the economic outlook.

The Fed earlier this week cut its target for the overnight bank-to-bank lending rate for the third time this year, to a range of 1.5%-1.75%. Kaplan did not take part in the 8-2 vote, but he was among the 17 policymakers that debated the action at the two-day meeting.

“I was willing to support this action as long as, on the condition, that it was accompanied with a clear articulation that for the time being the setting of monetary policy was, quote unquote, ‘appropriate,’” Kaplan told reporters after a talk at an energy conference run by Rice University’s Rice School of Business students. “That was for me necessary for me to get comfortable with this decision….the communication that the market and the people should not expect an additional action beyond the three fed funds decreases that we’ve done.”

Reporting by Ann Saphir; Editing by Chizu Nomiyama