EddieJayonCrypto
17 Jun 25
Goldman Sachs vice chairman Robert Kaplan believes the US economy would be experiencing deflation without President Trump's tariffs. He suggests recent inflation data indicates potential rate cuts later this year. Inflation rose 2.4% in May, slightly below expectations. Kaplan expects the Federal Re...
Goldman Sachs vice chairman Robert Kaplan believes that US tariffs have played a significant role in preventing deflation in the US economy. He suggests that without President Trump’s tariffs, the economy would currently be experiencing deflationary pressures. Recent inflation data, showing a 2.4% rise in May slightly below forecasts, hints at the possibility of Federal Reserve rate cuts later this year.
Kaplan expects the Federal Reserve to closely monitor the impact of tariffs over the coming weeks and months. He anticipates the first meaningful rate cut could come in September, with no changes likely in June or July. This outlook is shaped by ongoing uncertainties, including pending tariff decisions, budget issues, and unresolved tax legislation.
As a former Federal Reserve Bank of Dallas president, Kaplan highlights that the central bank may be inclined to ease monetary policy later this year if inflationary pressures ease once tariff effects become clearer. He interprets Fed Futures market expectations to support this timing, signaling preparation for possible action in the fall.
While the economic landscape remains clouded by tariff negotiations and legislative developments, Kaplan’s views suggest a cautious yet flexible approach by the Federal Reserve as it navigates inflation trends and external trade influences moving forward.