Rob Kaplan, Goldman Sachs Vice Chairman & Former Dallas Fed President, Talks Kevin Warsh

Summary

Bloomberg Talks — Rob Kaplan, Goldman Sachs Vice Chairman & Former Dallas Fed President, Talks Kevin Warsh

Date: May 22, 2026
Host: Bloomberg
Guest: Rob Kaplan

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Episode Overview

This episode features Rob Kaplan, Vice Chairman of Goldman Sachs and former Dallas Fed President, discussing Kevin Warsh’s appointment as the next Chairman of the Federal Reserve. Kaplan offers insider perspective on Warsh’s credentials, the key challenges facing the Fed, and the importance of independence in central banking. The conversation also touches on current macroeconomic headwinds, including inflation, interest rate expectations, and the transformative impact of artificial intelligence in business. The show closes with Kaplan's thoughts on the business climate in Texas and Goldman Sachs’s expansion in Dallas.

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Key Discussion Points & Insights

Kevin Warsh as Fed Chair: Qualities, Challenges, and First Steps

• Kaplan’s Endorsement

  • Believes Kevin Warsh will be an “excellent Fed chair” despite significant challenges ahead.
  • Warsh must prepare quickly for the first FOMC meeting and press conference, handle the dot plot, and clarify policy direction.
  • Quote:

    “He has a number of challenges in front of him, but I think he’ll be an excellent Fed chair.”
    — Rob Kaplan (00:36)

• Immediate Priorities for Warsh

  • Get up to speed for the next meeting and build rapport with the FOMC.
  • Shift the policy statement to a more neutral stance, correcting the previous "downward bias" and addressing recent dissents.
  • Prepare to explain a firmer rate trajectory in the dot plot at the upcoming press conference.
  • Quote:

    “He has to clean up the statement so it has more of a neutral bias. … He’s going to be responsible for explaining the dot plot in the press conference. So that’s a lot to prepare for in the next three or four weeks.”
    — Rob Kaplan (01:03–02:19)

Rate Policy in Light of Sticky Inflation and Geopolitical Risks

• Shift in Market Expectations
  • Eight weeks ago markets expected a rate cut; sticky inflation and high oil prices now have markets anticipating a possible rate hike or a prolonged hold instead.
  • The dot plot is likely to show a firmer rate path, indicating no cuts are imminent.
  • Quote:

    “Now the view is… the next Fed move may actually be a raise and they may do nothing this year.… they have to deal with inflation.”
    — Rob Kaplan (01:03)

Fed Independence Amid Political Pressure

• Navigating Presidential Influence
  • President Trump publicly called for Warsh to act independently, which Kaplan says is “not only possible, [but] essential.”
  • Warsh must maintain credibility by avoiding political influence and focusing solely on the Fed’s mandates: price stability and full employment.
  • Quote:

    “He has to be seen not only in the room at the FOMC as independent, but I think to the public… My advice to him would be he needs to not worry about any political constituencies at all.”
    — Rob Kaplan (02:36–03:30)

Jerome Powell’s Continued Role at the Fed

• Staying as Governor
  • Jerome Powell’s plan is to remain as a governor, but “fade into the background” to help ensure a smooth transition to Warsh’s leadership.
  • Powell is primarily remaining to address a narrow legal concern, and Kaplan hopes this will be brief.
  • Quote:

    “I would guess Jay Powell’s approach will be to be as quiet as humanly possible, … he’ll try not to do anything that might impede the ability of Kevin Warsh to step up and take control and do his job.”
    — Rob Kaplan (03:40)

Client Sentiment at Goldman Sachs: AI and Corporate Earnings

• AI as a Long-Term Growth Driver
  • Despite economic headwinds (sticky inflation, higher yields, strain on low/moderate income consumers), AI represents a “historic, structural trend.”
  • Massive investments ($800 billion in AI infrastructure this year) and widespread use case development across industries.
  • Solid yet sluggish US economic growth, but notable upward revisions in corporate earnings, particularly among smaller firms embracing AI.
  • Quote:

    “We’re going to see potentially a multi-year trend where S&P earnings are improving at double digit rates. Even though GDP growth is a little bit sluggish.… many businesses are going to use AI to improve their margins and their business.”
    — Rob Kaplan (04:29–05:42)

Goldman Sachs Expansion and Texas Business Climate

• Texas as a Magnet for Talent and Firms
  • Goldman Sachs’s Dallas office is expanding beyond 5,000 employees within a globally integrated workforce of 45,000+.
  • Texas’s pro-business culture, talent access, and collaborative atmosphere between government, academia, and business are major draws.
  • Growth supported by Texas’s welcoming and constructive regulatory environment.
  • Quote:

    “It’s a growing state, magnet for people and firms…there’s a very collaborative atmosphere between government and business, academia, nonprofits … that kind of mindset has been a magnet for people and firms.”
    — Rob Kaplan (05:55–06:59)

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Notable Quotes & Memorable Moments

• On Warsh’s Core Mission:

  “He has to worry about doing the job.”
  — Rob Kaplan (02:36)

• On Federal Reserve Independence:

  “For the Fed’s moves to have credibility, I think he’ll have to position himself as an independent arbiter who’s trying to make the very best decisions.”
  — Rob Kaplan (02:36)

• On AI’s Impact:

  “Every business is having to work on use cases about how they can build in AI adoption to improve their business.”
  — Rob Kaplan (04:29)

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Timestamps for Important Segments

• 00:25: Host welcomes Rob Kaplan, opens with questions about Kevin Warsh and the Fed Chair transition
• 00:36–02:19: Kaplan discusses Warsh’s qualifications and immediate tasks at the Fed
• 02:19–03:30: The importance of Fed independence and Warsh’s approach with President Trump’s remarks
• 03:30–04:21: How Jerome Powell will remain in the room but step back from the spotlight
• 04:21–05:42: Client sentiment and the impact of AI on business and earnings outlook
• 05:42–06:59: The Texas business environment and Goldman Sachs’s expansion in Dallas

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This episode provides a concise yet informative analysis of the evolving Fed leadership, the interplay between macroeconomic risk and structural tech trends, and the factors driving corporate and population migration to Texas. Rob Kaplan’s insider insights offer valuable context for listeners seeking to understand the intersection of policy, finance, and innovation.

Transcript

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[Interviewer]

Thanks so much for being with us, Rob. First of all, I want to talk about your reaction to Kevin Warsh as the next chairman of the Fed. You know him, you brought him to Dallas in the past. What do you think about this?

[Rob Kaplan]

I think he'll be an excellent Fed chair. He's got a lot on his plate, especially in the next number of weeks. He's got to get prepared for that first meeting and the press conference and the dot plot explanation, but I think he'll do, he'll do a very good job and he has a number of challenges in front of him, but I think he'll be an excellent Fitch here.

[Interviewer]

You just pointed to that next meeting. What do you expect in terms of interest rates, especially when you're looking at inflation in the war?

[Rob Kaplan]

Yes. So the reason I say it's challenging is if you roll back the clock. You know, eight weeks ago I think the view was the next Fed move would be a cut. It just a question of how late in the year was it going to be because of oil prices being elevated and inflation readings being stickier. Now the view is, and probably the conditions would warrant the next Fed move may actually be a raise and they may do nothing this year. And if they were going to do something, it would be more negative from a rate increase point of view because they have to deal with inflation. So he's going to have to work through that and the meeting itself. He's got to get to know people after day around the table. He has to understand their views. This is before the mid June meeting. He's got to clean up the statement so it has more of a neutral bias. Rather than remember the three dissents in the last meeting about the downward bias, he has to clean that up. And there's a dot plot that comes out after this meeting. And the dot plot is going to show expectations for the rate path are firmer, not lower. And so he's going to be responsible for explaining the dot plot in the press conference. So that's a lot to prepare for in the next three or four weeks,

[Interviewer]

as you very well know. You saw how President Trump was very public about Jerome Powell and his decisions. President Trump saying today, and this really stuck out to me in the press conference. He's telling Kevin I want you to be independent. I want you to do your own thing. Is that even possible?

[Rob Kaplan]

Yeah, I think it's not only possible, I think it's essential. And I think Donald Trump in his comments obviously is indicating that. And Kevin Warsh knows that. Meaning he has to be seen not only in the room at the FOMC as is independent, but I think to the public. For the Fed's moves to have credibility, I think he'll have to position himself as an independent arbiter who's trying to make the very best decisions to make sure we control inflation and we have full employment. And so whatever public statements might have been made in leading up to confirmation and up to now, I think you can wipe the slate clean on those. And I think Kevin Warsh will. And my advice to him would be he needs to not worry about any political constituencies at all. And I don't think he will. He has to worry about doing the job.

[Interviewer]

Former Fed chair Jerome Powell has decided to stay on as governor. You talked about the voices in the room. How does the new Fed chair handle that?

[Rob Kaplan]

Well, I would guess Jay Powell's approach was will be to be as quiet as humanly possible, given he's sitting around the table and he'll get a turn to speak. But I think he wants to fade into the background as much as he can allow the new Fed chair to take over. He's staying for a very narrow reason, I believe, which is he's worried about the legal overhang. And I would hope that Jay Powell stay there. Will the timeframe will be minimized as little as possible. But I think he won't. He'll try not to do anything that might impede the ability of Kevin Warsh to step up and take control and do his job.

[Interviewer]

I'm curious. I want to shift to Goldman Sachs. Before we let you go, I want to know what your clients are telling you right now about AI.

[Rob Kaplan]

So we obviously know that inflation's been stickier, the rate curve is moving up. It's having some challenging effects on the economy, low, moderate income consumers. But to your point, again, against all that, you've got a structural, historic, structural trend of not only AI infrastructure to build, compute, that's the 800 billion being spent this year. But AI adoption, and what we're seeing is every business is having to work on use cases about how they can build in AI adoption to improve their business. Here's how it's playing out in the US in the economic growth. Economic growth is solid, but kind of sluggish. Corporate Earnings growth on the other hand is being revised upward. And I think we're going to see potentially a multi year trend where S and P earnings are improving at double digit rates. Even though GDP growth is a little bit sluggish. It's going to be more concentrated in smaller names. But many businesses are, are going to use AI to improve their margins and their business. And that's what we're hearing from clients.

[Interviewer]

Before I let you go, we're sitting here in Texas. You're going to have a large, large new office in Dallas, well on your way to more than 5,000 employees here. What are you hearing from those that are deciding, hey, we're going to move to Texas.

[Rob Kaplan]

So at our firm we've got already 4,500 plus people here on our way to, as you said, over 5,000. That's part of a global firm that has 45,000 plus or minus people globally. This will be a major presence. And one of the things we like about Texas is it's a growing state magnet for people and firms here. Pro business culture, access to talent. And one of the things that we're also seeing, there's a very collaborative atmosphere between government and business, academia, nonprofits to where we have shared ownership. And I think that kind of mindset has been a magnet for people and firms to move here. It's very welcoming environment and pro business in a constructive way. And I think that's some of the various things that we like at Goldman Sachs and many of our clients like, which is why they're coming here.

[Interviewer]

Rob Kaplan, thanks so much for being with us.

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