Dallas Federal Reserve President Rob Kaplan said Tuesday he’s not too concerned about the slowing economic growth in the first quarter, and the U.S. economy is likely to grow at just under 2 percent for the year.
But Kaplan acknowledged the financial turmoil at the beginning of the year may have had more of psychological impact on consumers than previously thought.
“I want to see more data, because first quarter [growth] is very mediocre. But we still believe the underpinnings for solid growth are there,” he told CNBC’s “Squawk Box.”
“We still think the consumer is going to remain strong this year. The job market is strong,” he added.
However, the path to normalizing rates is not an easy one, he said, arguing the next five years are going to be as complex to navigate as the past five or 10 years.
“There are lots of reasons for that: slowing global growth, aging population in the United States and advanced economies, high levels of debt to GDP in all advanced economies,” he said.
Kaplan sees an interest rate hike in the not-too-distant future, provided gross domestic product numbers recover as he believes they will. “I think people should expect it’s going to be a slow, patient, gradual normalization.”
