Dallas Federal Reserve President Robert Kaplan on Thursday called on the Fed to be patient when it comes to raising interest rates, citing the effect of tighter financial conditions on U.S. economic growth. Kaplan believes that there is high downside risk in the outlook for world economic growth and also said that global financial conditions have tightened, restraining growth potential. Factors like the drop in world stock markets, the decline in the price of oil and the rise in the dollar since the beginning of the year are acting like a brake on the U.S. economic recovery, similar to the effect of an interest rate increase, he said. “While I believe that excessive accommodation carries a cost in terms of distortions and imbalances in hiring, asset allocation and investment decisions, I also believe that, at this juncture, the Fed needs to show patience in decisions to remove accommodation,” Kaplan […]