Fed July rate hold was ‘absolutely’ right, Kaplan says

Goldman Sachs Vice Chairman Rob Kaplan has backed the Federal Reserve’s 9–3 decision to hold interest rates at 3.50%–3.75% in July while urging policymakers to keep their options open before September. Summary Kaplan said the Fed was right to leave interest rates unchanged at its July meeting. Three policymakers supported a quarter-point increase, showing disagreement within the rate-setting committee. AI investment, tariffs, labor limits, and oil prices are creating competing inflation forces. Kaplan said fiscal deficits and bond supply concern him more than the federal funds rate. Why Kaplan supports the Fed’s July rate hold Bloomberg reported that Kaplan, a former president of the Federal Reserve Bank of Dallas, described the decision not to raise rates in July as “absolutely” correct because officials still have time to study inflation and economic activity before their next meeting. “If I see meaningful improvement, I might be willing to stay put, but I want to make full use of every moment before September to make judgments, avoiding rigidity or preconceived notions,” Kaplan said. Serving as Goldman Sachs vice chairman, Kaplan also sits on the bank’s management committee. His...