Former Dallas Fed Pres. Robert Kaplan: A couple of rate hikes is appropriate

• Fed raised interest rates by a quarter point, the first hike since 2023, with dot plots suggesting another hike by year-end.
• Kaplan believes raising rates is prudent risk management and that the market may have over-read any hawkishness from Fed officials.
• He states that financial markets have already priced in these moves, but interest-sensitive parts of the economy (small businesses, some consumers) will feel the pinch more than stock markets.

Robert Kaplan, former Dallas Fed president, discusses the Fed's recent quarter-point rate hike, the first since 2023, and the outlook for future increases. He believes the Fed's move was appropriate for risk management, and that financial markets have largely priced in these changes. However, he notes that interest-sensitive sectors and consumers will feel the impact more directly.