The U.S. central bank should be gradual and patient in tightening monetary policy further, said Dallas Fed President Robert Kaplan on Thursday. “I think there is more uncertainty, global growth is decelerating, I am seeing some interest rate sensitive sectors showing some weakness,” Kaplan said. “It is too soon to say what to make of it, but one of the key tools we have as a central bank is patience and I think we should be using that tool,” he said. There is a “good possibility” the economy is going to look very different in the first half of 2019 because the stimulus from the Trump tax cut is “waning,” he said. The flattening of the yield curve showed that expectations of future growth “are sluggish,” he added. Kaplan wouldn’t comment on whether “patience” meant the Fed should hold interest rates steady at its meeting that ends Dec. 19. The market is pricing in a 76% chance of a quarter-point move. Kaplan is not a voting member of the Fed’s interest-rate committee this year.
Have breaking news sent to your inbox. Subscribe to MarketWatch’s free Bulletin emails. Sign up here.