(Reuters) – Federal Reserve Bank of Dallas President Robert Kaplan on Thursday appeared to add a new pillar to the case he is building for reducing the U.S. central bank’s support for the economy, saying that the labor market is tighter than levels of employment suggest.
The factors crimping labor market supply “may not be particularly susceptible to monetary policy,” he wrote in a blog on the Dallas Fed’s website, and though they may fade as the year progresses, labor supply may increase less than expected. “It is our view that this possibility should be kept in mind as policymakers assess the appropriate stance of monetary policy,” he wrote.
