Odd Man Out at the Fed: Kaplan Talks Tapering, Inflation, Risk Management, Excesses in Financial & Housing Markets, Supply-Demand Imbalances | Wolf Street

In terms of the semiconductor shortage, he said, “people in that industry were telling me first [the issues would be resolved] within 12 months. Now it’s lengthening. Now they think it’s closer to 12 to 24 months. More uncertainty.”

As the economy is “making progress to achieving full employment and price stability, it would be healthy to begin the process in the not too distant future, sooner rather than later, to at least discuss weaning off these extraordinary measures” – these extraordinary  measures being the purchases of Treasury securities and mortgage-backed securities.

“I worry about excess risk taking in the financial markets, very tight credit spreads. I worry in particular about leverage and excess risk-taking building up in the nonbank financial market. I worry about some of the excesses and imbalances in the economy,” he said.

Odd Man Out at the Fed: Kaplan Talks Tapering, Inflation, Risk Management, Excesses in Financial & Housing Markets, Supply-Demand Imbalances | Wolf Street