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Southwest Economy, First Quarter 2021

President’s perspective

Rob Kaplan, president and CEO of the Dallas Fed, regularly speaks and writes on the factors that affect economic growth in the nation and Eleventh District. Here are some of his recent thoughts on key issues:
On the Stance of Monetary Policy

“My forecast has improved meaningfully. ... Having said that, we are still in the middle of a pandemic, and I want to see more than a forecast, and I want to see actual evidence that that forecast is going to unfold. As we do, and as we make substantial further progress on meeting our dual-mandate goals [stable prices and maximum sustainable employment], I for one am going to be an advocate of beginning the process of removing some of these extraordinary monetary measures, and doing it sooner rather than later. But I need to see outcomes, not just a strong forecast.”

CNBC Interview with Steve Liesman—March 23, 2021

On the Importance of the Vaccine Rollout

“The most important thing is how we manage the virus, and these variants, and getting people vaccinated and speeding the vaccinations so we head off the potential impact of these variants. That’s still the No. 1 thing I’m watching.”

Interview with Reuters—Feb. 17, 2021

On the Outlook for Inflation

“It wouldn’t be surprising to see the cyclical elements of inflation build, and I think that you will see some supply outages. We are already seeing evidence of it [in] semiconductors, metals, wood products, maybe even in oil markets. But I don’t think those are going to be persistent, I don’t think those are going to be long term.

"I think there is no question that the cyclical forces will build, and over time, the question for me is how strong are the accelerating forces of technology and technology-enabled disruption which have been muting inflationary pressures for some time. How do those cyclical and structural forces play out over time? That’s what I am going to be watching for. The temporary jump up or rise in inflation won’t surprise me. The question for me will be how persistent is it, and I think the jury is still out on that right now.”

Bloomberg TV Interview with Mike McKee—Feb. 9, 2021

Southwest Economy is published quarterly by the Federal Reserve Bank of Dallas.

Articles may be reprinted on the condition that the source is credited to the Federal Reserve Bank of Dallas.

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