Bloomberg Businessweek ICYMI: Trump’s Fed Building Tour Ends With a Relief Signal for Powell
Jul 28, 2025
Rob Kaplan, Vice Chairman of Goldman Sachs and former President and CEO of the Federal Reserve Bank of Dallas, dives into the intriguing dynamics of White House pressure on the Federal Reserve. He discusses Trump's recent visit to the Fed, highlighting its implications for monetary policy and the central bank’s autonomy. Kaplan analyzes the U.S. economic landscape, marked by sluggish growth yet solid fundamentals, and emphasizes the need for a careful balance between political influence and economic decision-making.
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Fed Independence Amid Pressure
- The Fed strives to make decisions purely based on economic data, ignoring political pressure.
- A strong ethic and culture within the Fed reinforces independence and focus on appropriate monetary policy.
U.S. Economy Outlook and Fed Challenges
- U.S. economic growth is sluggish but stable, with GDP expected around one percent this year.
- Tight labor markets and tariff uncertainties complicate inflation outlooks and monetary policy decisions.
Labor & Tariffs Impact on Inflation
- Tight labor supply due to immigration policies keeps wages firmer, influencing inflationary trends.
- Tariffs may cause temporary price increases, but a longer-term disinflationary trend could resume globally.