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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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Date: May 22, 2026
Host: Bloomberg
Guest: Rob Kaplan
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.
Kaplan’s Endorsement
“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
“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)
“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)
“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)
“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)
“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)
“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)
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)
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.