Goldman Sachs Analyst Endorses Fed July Inaction, Urges Open-Mindedness Until September

Robert Kaplan validates the Fed's July pause, citing complex inflation drivers like AI and tariffs. He advises policymakers to remain flexible until September, focusing on long-term yield structural imbalances rather than rigid guidance.

Woofun AI notes that Goldman Sachs analyst Robert Kaplan affirmed the Federal Reserve's decision to maintain rates in July as "absolutely" correct. He urged policymakers to keep options open until September, warning that rigid forward guidance could prove counterproductive given the complexity of current inflationary forces. Kaplan highlighted that while AI development, tariffs, labor constraints, and rising oil prices exert upward pressure, AI applications simultaneously accelerate disinflation. He suggested Warsh should use the Jackson Hole symposium to clarify the rationale behind the July inactivity rather than offering abstract commentary. Kaplan emphasized that his primary concern lies with long-term U.S. bond yields, attributing their global rise to structural supply-demand imbalances from persistent fiscal deficits rather than Federal Reserve policy actions.