Fed rate pause was the right call, Goldman’s Kaplan says

Goldman Sachs Vice Chairman Robert Kaplan has backed the Federal Reserve’s 9–3 decision to keep interest rates at 3.50%–3.75% in July, arguing that policymakers needed more time to assess inflation before acting. Summary The Fed held rates at 3.50%–3.75% in July despite three votes for an increase. Kaplan said incoming data should determine whether policymakers raise rates in September. AI investment, tariffs, labor shortages, and oil prices could keep inflation elevated. Kaplan said fiscal deficits, not Fed policy, are pushing long-term Treasury yields higher. Why Kaplan supports the Fed rate pause Bloomberg Television reported on Aug. 13 that Kaplan, a former president of the Federal Reserve Bank of Dallas, viewed the July pause as the correct decision despite continued inflation pressure and an unusually divided vote. During the July 28–29 meeting, the Federal Open Market Committee left the federal funds rate unchanged at 3.50%–3.75%. According to the Fed’s official statement, Beth Hammack of the Cleveland Fed, Neel Kashkari of the Minneapolis Fed, and Lorie Logan of the Dallas Fed voted for a quarter-point increase. Kaplan said policymakers should use the remaining time before ...