Fed's Kaplan says base case is for no change to rates this year

DALLAS (Reuters) - Though he’s keeping a close eye on developments with the new coronavirus in China and globally, Dallas Federal Reserve Bank President Robert Kaplan said on Thursday that interest rates are “roughly appropriate” and probably won’t need to change this year.

“I don’t see anything yet, although we are carefully watching this, that would cause me to think that a change in monetary policy because of the virus would be appropriate,” Kaplan told reporters after a talk at his bank’s headquarters. “I’ll have a better sense in the first few months of this year... I haven’t seen anything yet that would cause me to want to alter monetary policy in the medium term, either up or down.”

He added that in this context medium term means this year.

Kaplan also said he expects growth in the Fed’s balance sheet to moderate between now and June.

Reporting by Ann Saphir; Editing by Chizu Nomiyama