MNI BRIEF: Stickier Inflation Justifies Taper Talk- Kaplan

Dallas Fed President Robert Kaplan Thursday suggested one reason he wants to start the debate around tapering asset purchases soon is because part of the recent inflation run-up may reflect secular trends that could keep prices higher than in years past.

Kaplan said it is "my job to adapt to the current reality and to the future," suggesting that some labor trends and the economy's supply issues may be more secular. "From that point of view, it will be wiser sooner rather than later to begin discussions about adjusting our purchases, and with a view to taking the foot off the accelerator gently," he said. Part of that would also be reconsidering the Fed's MBS purchases.

Former policymakers have told MNI the Fed's outcome-based approach adopted last year has come under greater pressure. Esther George of the Kansas City Fed recently warned of a structural shift in the economy, suggesting the FOMC should be nimble in adjusting policy.