Robert S. Kaplan has come full circle. He started his career at Goldman Sachs as vice chairman and then partner, moved to join the faculty and become a dean of the Harvard Business School, was appointed President of the Federal Bank of Dallas where he served for six years, now is back in his original role as vice chair at Goldman. In other words he has successfully worn many hats.
Putting on his central banker hat for me, Rob says it’s clear from Jay Powell’s post-FOMC meeting press conference that he is cautiously laying the ground work for the Fed’s first rate cut of this cycle in September, as long as inflation does not surprise to the upside, which Rob does not expect.
”I think that was their mindset before the meeting. That's what he tried to convey, he says. “And what (Powell) tried hard, I think, to do is not commit themselves to acting in September, to making it still a choice they can make. But people should assume (they will) unless there's a surprise in terms of the beating data.”
Rob does expect Powell and his colleagues to continue move cautiously on rates waiting for the latet the inflation and jobs numbers to confirm that they should stay on this rate cutting path, making their decisions meeting by meeting.
We covered a lot of ground from what he sees at the big rift between Wall Street and Main Street, to what the nation’s large and rising budget deficit may mean for the Fed’s monetary policy parameters next year. He weighed in on the Bank of Japan’s unexpected rate hike this week and explained why demographics will remain the biggest challenge to Japan’s economy.
With all the hats Rob has worn over the years, he has a lot to say.
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