Goldman Sachs Says US Experiencing Disinflation if Not for Tariffs, Predicts Federal Reserve Cutting Rates Later This Year – Here’s When

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Goldman Sachs vice chairman Robert Kaplan recently shared his insights on the current state of the US economy in a new interview with CNBC. According to Kaplan, the wave of tariffs imposed by President Donald Trump has prevented the economy from slipping into a deflationary situation.

Kaplan, who previously served as the president of the Federal Reserve Bank of Dallas, pointed out that recent inflation numbers indicate the possibility of rate cuts later this year. He mentioned that inflation rose by 2.4% in May, slightly below the 2.5% predicted by economists.

The Fed is closely monitoring the impact of tariffs on the economy, with Kaplan emphasizing the importance of observing where the tariffs are set and how they affect various sectors. He expressed optimism that the tariff impact may be less severe than anticipated once the situation stabilizes.

In terms of Fed Futures, which gauge market expectations for changes to the Federal Reserve’s benchmark interest rate, Kaplan noted that there is a notable probability of a rate cut in September. He suggested that no action is likely in June or July, but the Fed may consider taking action in the fall depending on external factors such as tariff rates and pending budget and tax legislation.

As the market continues to adjust to evolving economic conditions, Kaplan’s insights provide valuable perspective on the potential trajectory of interest rates and inflation in the coming months.

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