Robert Kaplan, former president of the Federal Reserve’s Dallas branch and currently vice chairman at Goldman Sachs Group Inc., has suggested that the Federal Reserve is poised to decrease interest rates in September. Speaking to Bloomberg TV in Tokyo, Kaplan indicated that recent advancements in addressing inflation have paved the way for this move. He emphasized, however, that this anticipated rate cut does not signify the beginning of a broader cycle of rate reductions.
“The path for September is pretty clear,” Kaplan stated, adding, “I think there’s a good chance they could do one more cut in December.” He pointed out persistent challenges such as high fiscal deficits and elevated energy prices that could influence future monetary policy decisions, cautioning that each rate decision will be approached individually.
Kaplan’s remarks follow recent comments by Federal Reserve Chair Jerome Powell and other officials, acknowledging progress in curbing inflation toward the central bank’s 2% target, albeit without definitive timelines for rate adjustments.
Inflation showed signs of deceleration in the second quarter, with the core consumer price index rising just 0.1% in June, the smallest increase since 2021.
Looking beyond the U.S., Kaplan also highlighted economic challenges facing Japan, particularly demographic trends that are adversely affecting its workforce.
