Tag Archives: Dallas FOMC

Robert Kaplan Dallas FOMC President Town Hall Analysis and Update, New York President Williams Chimes in, Wall Street Journal’s Favorite Fed Reporter Too – Taper Transition to Begin

While not sure why all Federal Reserve Chairs do not do this type of event … there are an even dozen Fed Banks scattered across the country for roots in various geographic areas, we are very happy our local favorite, Dallas’s own Federal Reserve Bank President, Robert Kaplan has started his own town hall event.

Think this is our third or fourth attendance, with the first as mentioned here, becoming an accidental question…

Incidentally at this event, the first three questions were from acquaintances… Great Minds I guess!

Another Robert Kaplan Town Hall Update New York Fed Williams Chimes in

The most important item mentioned in this town hall was that Kaplan supports a taper of the 120 billion monthly purchases of Mortgage and Treasury bonds as soon as October, with an announcement in two weeks at the September 22, 2021 Fed meeting.

Luckily with the delay of the weekend to produce this full post, New York Federal Reserve (debatably the most powerful bank) Chair John C. Williams in a speech via video conference to St. Lawrence University said the following:

“There has also been very good progress toward maximum employment, but I will want to see more improvement before I am ready to declare the test of substantial further progress being met. Assuming the economy continues to improve as I anticipate, it could be appropriate to start reducing the pace of asset purchases this year. I will be carefully assessing the incoming data on the labor market and what it means for the economic outlook, as well as assessing risks such as the effects of the Delta variant.”

Wall Street Journal’s Go To Reporter Pens Friday Article

Then the following story hit the Wall Street Journal Friday, September 10, 2021 by the Fed’s favorite go to reporter, NIck Timiraos..

NIck runs with a November 2021 Taper Transition and a 15 Billion per meeting drop off from the current 120 Billion monthly purchase…

What to Watch – Longer Term Interest Rates, Markets Themselves

If this is true, and the FOMC does begin taper, we will need to keep a sharp eye on interest rates, especially the longer end i.e. 10 year treasury.

Near then end of 2018, the FOMC began lowering asset purchases AND raising rates at the same time… Markets protested with a sharp 20% drop, causing Fed members to reverse course.

Kaplan and other officials are reiterating that just because the Taper may begin, interest rate increases are not on the horizon yet.

Recall in our very recent Kyle Bass review, where Fed officials are known to carefully watch the Capital Market reaction to their comments. If as true as Bass thinks, Fed officials will be watching close!

Other Kaplan Notes from the Town Hall:

  • Delta hurting travel, and leisure, Dallas Fed US GDP estimate 6.5 down to 6 because of delta
  • Slow workers with Jobs, Aug jobs number not surprised Sept slower than expected, JOLTS showing work avail, fear of delta keeping away,
  • 3 mill folks left workforce since 2-20, 1.5 milion left for care of kids – matching problem work
  • Supply demand on materials,  PCE will be 4% PCE headline will be 2.6% 2022-
  • Economy recovering slow Q3 but still growing, 3% inflation 2021
  • Economic Fits and starts bc delta- vaccine, booster, masks help but
  • High frequency mobility data not falling, folks adapting and managing through
  • Business expect supply demand last longer than thought
  • Worker demand higher pay, higher absence, reluctant to come back to labor force
  • Mid to small business tougher time with employee—Larger Businesses more flexibility
  • Broadly all businesses raising prices and they will stick

Apologies for the length of this post … this was a combination Reporter, notes and collection of various data points…

A smooth transition is very important, and long desired by many in the investment community, buckle up and let’s see how it goes!

Have a Great “Smooth Taper Transition” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.



Robert Kaplan Update – Round Table State of Economy – “Sooner Rather than Later!”

One of our favorite Federal Reserve Presidents Dallas’s own Robert Kaplan had another Round Table discussion the most recent Monday night….

Those with great memories may recall my fiasco when listening to his Round Table discussions and accidentally raising my hand for a live question…. good news, avoided that this time! haha

Elephant in the Room – Inflation or Not?

While leading with stats and updates, the review order has been changed due to the very end of the discussion and importance…

Recalling from the Mauldin SIC conference of the last two weeks and and once again here we are…. Elephant topic for Kaplan – Inflation or Not?

(Have you ever been on a call or virtual visit like this and wondered who else is on? – Am I wasting my time here? Or is this a good use of the late evening? – See callers below for answer!)

Live Callers

After about four or five live callers, the moderator announce, “Our next caller is Byron Wien!” – WHAT!

Wien is an 88 year old veteran of the Capital Markets and currently Vice Chair of Blackstone the largest money manager in the US!

What is he doing listening to a Dallas Reserve President at this time of the night – he is one hour later!

In a no nonsense, direct question, Wien asks or more insists “There is inflation and it is coming faster than officials think! What are you guys going to do?”

Kaplan answers directly that he thinks tapering monthly purchases along with increasing of rates should come “Sooner Than Later!”

This statement was repeated more than any other statement and even at one juncture, Kaplan stated “I said this in March and have seen nothing to change my view!” Sooner Rather than Later!

Kaplan goes on to say ” It is better to let off the accelerator and coast and possibly tap the brakes rather than staying on the accelerator and having to jam the brakes quickly!” We Agree!

Last up from the live call ins :

Robert Sakowitz – Concerns about shipping and port trouble- his personal example of $2600 pod now costing him $8000- (Has to be passed on somewhere? right?)

Based on our research and his question, most likely a multi generational retail magnate!

Both calls were concerning inflation, with several others concerned the FED has stayed to long and their mandate has been met!

Interesting Stats from Kaplan

2 million worker age 55 and over retired since Covid, dropping a valuable portion of the workforce

1.5 million women left workforce to care for children- Wow !

Texas and the surrounding Dallas Fed Area High School Superintendents on average graduate 85% of seniors and now only 60% – creating a shortage of skilled workers –

Taper and Policy – How can FED withdraw without market disruption? SLOOOOWLY

Learned from 07-09 – Telegraph in advance and give market time to absorb

What signals will use for taper – FOMC in Dec of 2020 agree that substantial further progress (Kaplan believes this statement is key and is very open to be used and interpreted many ways)

Input supply demand imbalances – metals, food, wages, PCE of April – June – elevated levels – uncertain of how long will persist

Believe inflation run at 2% and anchored there-

11 million barrels of Oil last year, thinks can only to to 11.25 million per day- fossil fuel here for decades longer, maybe not at the same level as prior but will not go away

Great Final Question from the Moderator

What Keeps Me Up at Night? (Recall same exact question of Buffet at annual meeting and the EXACT same answer)

“No textbook for this recovery, this is unlike any other recovery we have ever had- no prior example – We must manage the risk be nimble if possible !”

There you have it… Local Dallas Fed President echoing a lot of things we have been hearing, spoken of and discussed here!

Good News – Time will Tell and it will not be a long time (quarters, not decades)

Have a Great “Kaplan Update” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.



Kaplan Town Hall Review … Second Most Recent FOMC Update Meeting Last Week… Procrastination Leads to Lucky Update

As mentioned in our embarrassing post here recently The Dallas Federal Reserve had a Town Hall meeting with special guest speaker Dallas federal president reserve Robert Kaplan.

One of our favorite things to do is listen to people like Robert Kaplan in less public venues in order to try and get their candid or less guarded opinions.

This will make the 10th article talking about Kaplan and as such you may notice that we are pretty big fans.

Kaplan Town Hall Candid Comments

What was interesting about this town Hall meeting was that Kaplan for the first time since his tenure at the FOMC dissented about the federal reserves decision due the fact the the FOMC made a three pronged approach for their interest rate movement decisions.

What do we mean? In the released report from the FOMC chaired by Jerome Powell but with Robert Kaplan a voting member at the meeting they released the following unique statement

1. We intend on having interest rates lower for longer – In Kaplan’s opinion and ours, that was enough

2. We will keep interest rates lower even if inflation ticks up – this is the comment that Kaplan had an issue with and we do as well as we have written multiple times ( here here here and here ) that inflation may actually raise its head , Kaplan agreed!

3. Until a very lower rate of unemployment. is established we will also wait to raise rates

That’s just too many strings to attach to the FOMC and to especially hand over to future decisions makers!

Kaplan, during the Town Hall Event

Maybe the reason we like Kaplan so much is he seems to think very much like we do and have similar concerns. By attaching these three points together future Federal Reserve board members are being bound by a multi point limitation that could cause problems. What if one of these points gets dramatically above target but another is not thereby limiting the increase in interest rates?

Kaplan … like us, believes that there is a time in the not too distant future where interest rates will need to be raised and normalized not only for inflation limitations but also for industries that rely on higher interest rates.

Kaplan also mentioned that low interest rates for too long of a period of time may cause people to take greater risks than they otherwise would.

Lastly, Kaplan once again seeing eye to eye with our beliefs, said that low interest rates for too long of a period of time becomes not only helpful but a stimulus that is unneeded once the economy gets rolling.

Time will tell but once again we like Kaplan’s thoughts on higher interest rates potentially sooner rather than later but likely a year or so out!

Updated Thoughts From More Recent FOMC Statement

So time flew past us on getting this post to you, but in true making Lemonade out of Lemons fashion, something neat occurred….

Our Procrastination lead to a Lucky Update!

Last week, the FOMC released their latest statement here and guess what?

No strings like the prior meeting, just simple slow economy stuff and, Kaplan voted FOR the opinion… no dissenting this time.

Maybe the FOMC members have already backed down from their prior “Strings Attached” discussion!

Have a Great “Kaplan FOMC” Update!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.



Meet the Trimmed Mean Inflation Gauge … A Measure to Keep Watch

With the FOMC (Federal Open Market Committee) led by Jerome Powell and company at their most recent meeting, made the following comments:

On price stability, the FOMC adjusted its strategy for achieving its longer-run inflation goal of 2 percent by noting that it “seeks to achieve inflation that averages 2 percent over time.” To this end, the revised statement states that “following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.”

The updates to the strategy statement explicitly acknowledge the challenges for monetary policy posed by a persistently low interest rate environment. Here in the United States and around the world, monetary policy interest rates are more likely to be constrained by their effective lower-bound than in the past.

Let’s Decipher these Comments and Bring On the Tracking

The comments above, were understood by many/most on Wall Street to mean rates will be allowed to stay lower for longer and the 2% inflation rate is not a hard line number….

The following is the Trimmed Mean Inflation Rate completed by our very own Dallas Federal Reserve, just down the street from us!

It is basically taking the far outliers in any report out and calculating the number. This rate is one of the most watched inflation numbers by the FOMC!

Here are the actual numbers- watch that 2% number!

When rates go up, it is a headwind for Capital Markets …

Let’s keep a watchful eye on this… we are tracking you Mr. Trimmed Mean.

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.



Richard Fisher, FORMER Dallas Federal Reserve Chairman issues a warning

Long the admirer of Richard Fisher, FORMER (retired this month) Dallas Federal Reserve Chairman and noted Hawk (believes rates should rise) …. Regularly speaks his mind, especially after he is no longer bound by the constraints of his employment.

3-18-15 Fisher Santelli

It’s seven minutes, so if you do not have time, here is the gist, which we strongly agree:

  • Investors are too dependent on the FOMC … Low rates !
  • The Capital market are priced to perfection and could be do for a strong pullback
  • The US is doing good and progressing…albeit slowly

Just as consumer confidence is soaring … more on this later … overconfidence may occur with market participants … not us of course!

Have a Great safe day !

John A. Kvale CFA, CFP

8222 Douglas Ave # 590
Dallas, TX 75225