CORPUS CRISTI, Texas, Sept 20 (Reuters) - Dallas Fed President Robert Kaplan said on Friday he supports the “modest and limited” interest-rate cuts that the U.S. Federal Reserve has delivered this year to keep the economy humming, despite weakness in manufacturing due to slowing global growth amid rising trade tensions.
“My concern is that that weakness may seep into other parts of the U.S. economy, so that ultimately over the next several months, that weakness intensifies, and will ultimately catch up with the job markets, and will ultimately catch up and diminish consumer confidence, and maybe affect consumer behavior,” Kaplan said at a lunch in Corpus Cristi, Texas.
“If we wait to see evidence of a weakening consumer.. we’ve waited too long....I would rather take action now, modest and limited action now.”
The Fed on Wednesday cut its overnight policy rate by a quarter of a percentage point, targeting a range between 1.75% and 2.0%. The decision, taken to offset slowing global growth and risks associated with President Donald Trump’s trade battles with China, drew three dissents out of 10 total votes.
It was the second Fed rate reduction this year, but part of a much larger shift since the start of 2019, when the Fed expected to be raising rates through the year. (Writing by Ann Saphir in Corpus Cristi, Texas; Editing by Bernadette Baum)