Rob Kaplan

If you saw unemployment begin to spike higher where it's clear it's on its way to 5%, I think that would – if I were at the Fed, that would get me on my front foot that maybe I might be willing to take some liberties in thinking that demand destruction – will offset some of this cost push. The other thing that would cause the Fed to act if you saw disorder

in either the treasury market or the other financial markets.

in either the treasury market or the other financial markets.

Well, we haven't seen it yet. I think it's not a great combination. We talked right before this interview. When gold is going up, the dollar is weakening, the 10-year is inching back up while the market is selling off. That is not what you want to see.

Well, we haven't seen it yet. I think it's not a great combination. We talked right before this interview. When gold is going up, the dollar is weakening, the 10-year is inching back up while the market is selling off. That is not what you want to see.

But it happened in an orderly way. I think the Fed is on their toes looking at overnight liquidity and market function. If that continues to be orderly, They won't act, but they're watching it.

But it happened in an orderly way. I think the Fed is on their toes looking at overnight liquidity and market function. If that continues to be orderly, They won't act, but they're watching it.

I'll put it this way. There'll be a new SEP, summary of economic projections, in June. If I were submitting my estimate in March, I would have said two. If I were submitting in June, believe it or not, I might also say two.

I'll put it this way. There'll be a new SEP, summary of economic projections, in June. If I were submitting my estimate in March, I would have said two. If I were submitting in June, believe it or not, I might also say two.

That's less than the market expects, but I want to do that deliberately in that I want to leave our options open depending on what happens with these tariff and other decisions, and I don't want to be in a position where we sort of indicated to the market we're going to do more than we're really able to do.

That's less than the market expects, but I want to do that deliberately in that I want to leave our options open depending on what happens with these tariff and other decisions, and I don't want to be in a position where we sort of indicated to the market we're going to do more than we're really able to do.

And so I think the market is likely to be disappointed with the Fed forecast in June for how much they're going to do. That doesn't mean they won't do more. It means they want to retain their operating flexibility. And again, I've said this, you want to be, in this period, a risk manager, not necessarily a prognosticator.

And so I think the market is likely to be disappointed with the Fed forecast in June for how much they're going to do. That doesn't mean they won't do more. It means they want to retain their operating flexibility. And again, I've said this, you want to be, in this period, a risk manager, not necessarily a prognosticator.

So you look at all of it. You look at the soft data. You look at the hard data. And I know from experience, sometimes weakness in the soft data doesn't always translate into what happens with the hard data. And also, you've got governments in the midst of making decisions that can change sentiment. The one piece of soft data that I would rank above many of the others is is inflation expectations.

So you look at all of it. You look at the soft data. You look at the hard data. And I know from experience, sometimes weakness in the soft data doesn't always translate into what happens with the hard data. And also, you've got governments in the midst of making decisions that can change sentiment. The one piece of soft data that I would rank above many of the others is is inflation expectations.

The Fed is very focused not only on bringing inflation down to two, but making sure that inflation expectations remain anchored so that people still believe the 2% goal is credible.

The Fed is very focused not only on bringing inflation down to two, but making sure that inflation expectations remain anchored so that people still believe the 2% goal is credible.

that if inflation expectations start to inch up, then maybe businesses start to preemptively raise price. Consumers start to buy thinking prices are going up. We just saw that recently, but where consumers increase their purchases, we think, because they thought prices are going up. That means inflationary expectations are moving up. You do not want that at the Fed. You want them to be anchored

that if inflation expectations start to inch up, then maybe businesses start to preemptively raise price. Consumers start to buy thinking prices are going up. We just saw that recently, but where consumers increase their purchases, we think, because they thought prices are going up. That means inflationary expectations are moving up. You do not want that at the Fed. You want them to be anchored

because if they become unanchored and behavior changes as a result of it, it's harder to get to the 2% target. So they're going to be watching that very carefully. So if you see Jay Powell or other Fed speakers sound more hawkish, I would be too. Even if I were thinking I want to look for a way to cut, I would talk hawkish because I want to keep these inflation expectations anchored.