Goldman Sachs: Fed Stand Pat in July Absolutely Right, Should Stay Open Until September

BlockBeats News, August 13th. Goldman Sachs analyst Robert Kaplan stated that the Fed's decision not to raise interest rates in July was "absolutely" correct. He urged policymakers to remain open-minded before September, citing the complex factors affecting inflation. He argued that rigid forward guidance could backfire.

Kaplan said, "If I see meaningful improvement, I may be willing to stay put. However, I want to take full advantage of every moment before September to make an assessment, avoiding rigidity or preconceptions." The current forces at play include inflation pressure from AI investments, tariffs, labor constraints, and surging oil prices. At the same time, AI applications are acting in the opposite direction, hastening the downward trend in inflation. Powell should use his speech at this month's Jackson Hole symposium to briefly explain the rationale behind the Fed's July hold and avoid delivering purely "philosophical" speeches. The global rise in long-term U.S. Treasury yields reflects a structural supply-demand imbalance driven by a persistent large fiscal deficit, not Fed policy.