Bar would be high for me to move rates in October, says Fmr. Dallas Fed President Robert Kaplan

• Kaplan believes the bar is high for an October rate hike, advocating for a more deliberate approach and waiting until December.
• He highlights that economic strength is driven by AI, infrastructure, and defense, while interest-sensitive sectors and low-to-moderate income consumers are sluggish.
• The bond market's rise in yields is attributed to uncertainty regarding Fed communication and a risk premium from geopolitical events impacting diesel prices.

Former Dallas Fed President Robert Kaplan suggests the Fed should be deliberate and likely skip an October rate hike, preferring to wait until December. He notes the economy's strength is concentrated in specific sectors, while interest-sensitive areas are sluggish. The bond market's recent yield surge reflects uncertainty about Fed communication and a geopolitical risk premium, particularly concerning elevated diesel prices.