DALLAS/WASHINGTON (Reuters) - The Federal Reserve should keep raising U.S. interest rates until mid-2019, and only then needs to take a decision on when it ought to stop, Dallas Fed President Robert Kaplan suggested on Friday.
Kaplan has previously said he thinks the Fed should raise rates three or four more times over the next nine to 12 months to lift interest rates to the 2.5 percent to 2.75 percent range he views as neutral, a view he reiterated on Friday at a conference at his bank’s headquarters.
Asked if rates should go beyond that level, as fellow policymaker Chicago Fed President Charles Evans suggested earlier this week, Kaplan said it’s too early to say.
“That’s a judgment that I’m not prepared to make yet and I don’t have to make yet, because it won’t be until middle spring to middle of next year before we are approaching a level that I think is in the range of neutral, and I will all along the way be revising my views for what is the outlook for the economy,” he told reporters.
The debate over how far to raise rates is paramount at the Fed under Chairman Jerome Powell, who has so far overseen two rate hikes this year and is expected to raise rates two more times before the year is out. In a recent speech Powell suggested he was wary of relying too much on estimates of the neutral rate to guide policy.
Kaplan on Friday pushed back on jettisoning the concept.
“If you know that the neutral
