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The New Leader Of The Dallas Fed On Interest Rates, Inflation, And Goldman Sachs


Robert Kaplan is the new leader of the Federal Reserve Bank of Dallas. He’s filling the formidable shoes of Richard Fisher, who was an outspoken voice against many of the Fed’s moves since the financial crisis.

Kaplan sat down with KERA’s Rick Holter to talk about the Fed’s next move: possibly raising interest rates.


Interview Highlights: Robert Kaplan…

…On the factors the Federal Reserve Bank is considering for raising interest rates:

“There are two main criteria we look at: one is employment, and the other is referred to as price stability or inflation.

We’re at five percent unemployment in this economy. I think there's probably still some slack in the labor market…but I think everything I see shows that we're well on our way to meeting that objective.

Inflation on the other hand been trickier. We have a two percent inflation target. We've been well below it…We're still optimistic that over the near to medium term, we’ll gradually move up to two percent. I also think there is a real cost to being at zero [percent in the federal funds rate]…being had zero is not costless, it costs in terms of distortions and trying to begin to normalize, I think, would be a healthy and useful thing for us to do.”

Credit Federal Reserve Bank of Dallas
Robert Kaplan is the new chief of the Federal Reserve Bank of Dallas. He spent more than 20 years at Goldman Sachs and taught at Harvard for a decade.

  …On the Texas economy during the economic crisis:

“The headline is how resilient Texas has been despite a precipitous drop in oil and oil prices. The state has a number of features that help explain the resiliency.

One, the economy is much more diversified then it has been.

Also, the state has had higher level of migration and population growth than the rest of the country. The state has grown about one percent faster than the rest of the United States on average since 2000. That is really significant. I'm optimistic and believe that migration and population growth is going to continue. More companies are likely to relocate here.

Related: A little bit of inflation is actually a good thing (APM Marketplace)

In the near term, we're clearly suffering through the fact that there's an oversupply of oil in the world. When you look at what's going to have to happen for supply demand to get in the balance, we think it could still be another year-and-a-half to two years before it does.”

…On criticism of his appointment to the Federal Reserve Bank of Dallas:

“I understand why people are sensitive because of what just happened in the financial crisis and the bailouts. I think only I can say to people is, as they get to know me and I spend time in this state and in this district and in the country, I think they'll see that I'm focused on adding value to this community. Give me a chance, get to know me, and then judge me based on the job I do.”

Robert Kaplan is the new chief of the Federal Reserve Bank of Dallas.

Former KERA staffer Krystina Martinez was an assistant producer. She produced local content for Morning Edition and She also produced The Friday Conversation, a weekly series of conversations with North Texas newsmakers. Krystina was also the backup newscaster for the Texas Standard.
Rick Holter was KERA's vice president of news. He oversaw news coverage on all of KERA's platforms – radio, digital and television. Under his leadership, KERA News earned more than 200 local, regional and national awards, including the station's first two national Edward R. Murrow Awards. He and the KERA News staff were also part of NPR's Ebola-coverage team that won a George Foster Peabody Award, broadcasting's highest honor.