CPI numbers consistent with Fed’s outlook

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In an interview with CNBC on Wednesday, Dallas Fed President Robert Kaplan said the Consumer Price Index numbers were consistent with the Federal Reserve’s inflation outlook, as reported by Reuters.

Additional takeaways

“Fed still expects a broadening of inflation pressures into next year.”

“Fed has to be attentive to inflation continuing to run above 2%.”

“Fed has to be ready to react however inflation unfolds.”

“If economy unfolds between now and September meeting, in favor of announcing a plan at September meeting and beginning taper in October.”

“There are a range of view at the Fed on when to taper.”

“FOMC in a much better place on taper than it was two months ago.”

“Asset purchases are equipped to stimulate demand but current issue is one of supply.”

“Would rather take foot of accelerator soon.”

“Do not want Fed to run at this speed for too long and for Fed to have to take more aggressive action later on.”

“Would want taper to occur over a period of 8 months.”

“Will look at different criteria for raising interest rates.”

“Asset purchases not well suited to current US economy.”

Market reaction

The US Dollar Index remains on the back foot following these remarks and was last seen losing 0.25% on the day at 92.83.

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