The Fed's Tightrope: Inflation, Labor, and the Path Ahead

77 snips

Nov 18, 2025

Robert Kaplan, Vice Chairman of Goldman Sachs and former president of the Federal Reserve Bank of Dallas, dives into the complex landscape of inflation and labor markets. He discusses the Fed's tough decisions ahead, especially with inflation surpassing targets amidst a weakening labor market. Kaplan highlights various headwinds from tariffs and immigration uncertainty while also pointing to potential growth tailwinds like tax incentives and the AI boom. He emphasizes the Fed's cautious approach to potential rate cuts and the influence of political pressure on its independence.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

INSIGHT

Fed Faces An Agonizing December Choice

The Fed faces a genuine agonizing decision on December because labor weakness and inflation pull in opposite directions.
Powell's balanced press conference deliberately left more time for committee debate and a likely game-time decision.

INSIGHT

Crosscurrents Mask True Labor Strength

Multiple near-term headwinds (tariffs, provisional-worker uncertainty, shutdown) are weighing on hiring and growth.
Several tailwinds (tax incentives, regulatory reform, AI data-center boom) could strengthen growth in 2026, making the net outlook unclear.

INSIGHT

Elevated Inflation Raises Neutral-Rate Stakes

Inflation is running materially above target at roughly 2.75–3% and may be partially embedded.
That elevated inflation raises the neutral nominal funds-rate estimate and complicates decisions about cutting to neutral.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

With inflation above target and the labor market weakening, is the Fed poised to cut rates again? Rob Kaplan, Vice Chairman of Goldman Sachs, discusses the uncertain outlook with Allison Nathan.

This episode was recorded on November 12, 2025.

The opinions and views expressed herein are as of the date of publication, subject to change without notice, and may not necessarily reflect the institutional views of Goldman Sachs or its affiliates. The material provided is intended for informational purposes only, and does not constitute investment advice, a recommendation from any Goldman Sachs entity to take any particular action, or an offer or solicitation to purchase or sell any securities or financial products. This material may contain forward-looking statements. Past performance is not indicative of future results. Neither Goldman Sachs nor any of its affiliates make any representations or warranties, express or implied, as to the accuracy or completeness of the statements or information contained herein and disclaim any liability whatsoever for reliance on such information for any purpose. Each name of a third-party organization mentioned is the property of the company to which it relates, is used here strictly for informational and identification purposes only and is not used to imply any ownership or license rights between any such company and Goldman Sachs.

A transcript is provided for convenience and may differ from the original video or audio content. Goldman Sachs is not responsible for any errors in the transcript. This material should not be copied, distributed, published, or reproduced in whole or in part or disclosed by any recipient to any other person without the express written consent of Goldman Sachs.

Disclosures applicable to research with respect to issuers, if any, mentioned herein are available through your Goldman Sachs representative or at http://www.gs.com/research/hedge.html.

Goldman Sachs does not endorse any candidate or any political party.

Learn more about your ad choices. Visit megaphone.fm/adchoices