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Kaplan Says Fed Missed July, Mistaken December Cut

8/18/2026

34 3 Full Breakdown

Summary

Kaplan Warns Fed

Robert Kaplan, vice chairman and former Dallas Fed president, told Bloomberg that the Iran war and oil-price spike are driving the Federal Reserve (Fed) rate-hike debate.
Kaplan said AI infrastructure construction is likely inflationary, while AI adoption and Chinese overcapacity should be disinflationary.
He added that tariffs, labor constraints and other price spikes worsen inflation, leaving him unable to pick a policy direction.

Summary

Kaplan Slams Cut

Former Dallas Fed president Robert Kaplan said the Federal Reserve was right to skip a July rate hike and that the December cut was a mistake.
Kaplan, vice chairman of Goldman Sachs, no longer votes on Fed policy decisions.
His willingness to criticize recent Fed actions contrasts with the reticence of current officials.
Observers note that Kaplan is among the most frequently quoted former Fed officials, giving his commentary weight.

History

Historical Context

In the late 1970s, oil price shocks pushed U.S. consumer inflation to 13.5% in 1980, the highest in decades. Newly appointed Fed Chairman Paul Volcker responded by raising the federal funds rate to about 20% by June 1981, triggering the 1980-82 recession. The same tight-money approach is cited today as policymakers consider fresh hikes amid oil-related price spikes and technology-driven demand.

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Kaplan Warns Fed

Robert Kaplan, vice chairman and former Dallas Fed president, told Bloomberg that the Iran war and oil-price spike are driving the Federal Reserve (Fed) rate-hike debate.
Kaplan said AI infrastructure construction is likely inflationary, while AI adoption and Chinese overcapacity should be disinflationary.
He added that tariffs, labor constraints and other price spikes worsen inflation, leaving him unable to pick a policy direction.

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