Former Dallas Fed President Kaplan Says Market Overprices Fed Hikes

The bond market is currently overestimating the likelihood of additional Federal Reserve interest rate increases, according to Robert Kaplan, the former president of the Dallas Federal Reserve. Speaking on a Goldman Sachs podcast, Kaplan suggested that financial markets are getting ahead of themselves regarding the central bank’s monetary policy trajectory.

Kaplan indicated that the Fed’s decision to raise rates in September was justified and that policymakers would likely be correct to implement another increase in December. However, he projected a pause in rate adjustments during October, signaling that the central bank may adopt a more measured approach in the immediate term.