Gunjan Banerjee

Welcome to WSJ's Take on the Week. I'm Gunjan Banerjee.

Welcome to WSJ's Take on the Week. I'm Gunjan Banerjee.

We are facing one of the most uncertain economic moments in recent history, and the Federal Reserve is at a crossroads. Will it cut interest rates this year? And how are central bankers thinking about the intense volatility in financial markets? We have the perfect person to chat with us about this today. We have Rob Kaplan, who is vice chairman at Goldman Sachs.

We are facing one of the most uncertain economic moments in recent history, and the Federal Reserve is at a crossroads. Will it cut interest rates this year? And how are central bankers thinking about the intense volatility in financial markets? We have the perfect person to chat with us about this today. We have Rob Kaplan, who is vice chairman at Goldman Sachs.

He previously served as president and CEO of the Federal Reserve Bank of Dallas. Rob, thank you for joining us.

He previously served as president and CEO of the Federal Reserve Bank of Dallas. Rob, thank you for joining us.

So we have a really big Fed meeting coming up. It feels like more than ever, the Fed and investors are just navigating a really, really uncertain time. How are you thinking about this moment in light of tariffs, the economy and everything else going on right now?

So we have a really big Fed meeting coming up. It feels like more than ever, the Fed and investors are just navigating a really, really uncertain time. How are you thinking about this moment in light of tariffs, the economy and everything else going on right now?

And on top of that, you might have an economy that's already slowing, as we saw in the data recently.

And on top of that, you might have an economy that's already slowing, as we saw in the data recently.

You've said you're worried about stagflation. Tell us why.

You've said you're worried about stagflation. Tell us why.

So it's interesting because I think a lot of investors think that if we tip into a recession this year, the Federal Reserve would cut. One question I have is... And they might be right. Right. They might be right. In 2022, though, Powell did say, like, I thought that Powell made it clear that he was willing to accept a recession.

So it's interesting because I think a lot of investors think that if we tip into a recession this year, the Federal Reserve would cut. One question I have is... And they might be right. Right. They might be right. In 2022, though, Powell did say, like, I thought that Powell made it clear that he was willing to accept a recession.

And his priority was getting inflation back down to 2%.

And his priority was getting inflation back down to 2%.

Are investors wrong to think that the Fed will cut them in light of all of this?

Are investors wrong to think that the Fed will cut them in light of all of this?

Is there a level of unemployment at which the Fed would say, hey, we need to cut now? What is the tipping point?

Is there a level of unemployment at which the Fed would say, hey, we need to cut now? What is the tipping point?