Rob Kaplan

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.

They're moving up and they're moving in the wrong direction. And it does reflect behavior on the ground. Businesses are preempting. There's a new word in the dictionary. It's called surcharge. And I always heard the word, but it's on bills now. There's a surcharge and it's for either current or anticipated tariffs. And consumers are starting to get in their mind that prices are moving up.

They're moving up and they're moving in the wrong direction. And it does reflect behavior on the ground. Businesses are preempting. There's a new word in the dictionary. It's called surcharge. And I always heard the word, but it's on bills now. There's a surcharge and it's for either current or anticipated tariffs. And consumers are starting to get in their mind that prices are moving up.

You want to anchor that. And the best way right now the Fed can do that is jawboning. So people shouldn't misinterpret it. Gee, Jay Powell sounded very hawkish. That means they're not going to do X, Y, or Z. No, to me, it means he wants to keep their options open and he wants to anchor inflation.

You want to anchor that. And the best way right now the Fed can do that is jawboning. So people shouldn't misinterpret it. Gee, Jay Powell sounded very hawkish. That means they're not going to do X, Y, or Z. No, to me, it means he wants to keep their options open and he wants to anchor inflation.

I talk to investors around the world too.

I talk to investors around the world too.

So for businesses, by and large, they'll adjust. But what's hard for them is something that happens abruptly. So if there's a well-telegraphed change, they have time to adjust to it. The auto companies are a good example. In a couple of years, over a year or two, they can make adjustments. They can make investments. They can change locations.

So for businesses, by and large, they'll adjust. But what's hard for them is something that happens abruptly. So if there's a well-telegraphed change, they have time to adjust to it. The auto companies are a good example. In a couple of years, over a year or two, they can make adjustments. They can make investments. They can change locations.

But if it happens abruptly, which this has, a lot of businesses I talk to have a number of things they're working on to adjust. But what they're saying to me is, I just can't do it overnight. Might take me six months, 12 months. I can inch away different things.

But if it happens abruptly, which this has, a lot of businesses I talk to have a number of things they're working on to adjust. But what they're saying to me is, I just can't do it overnight. Might take me six months, 12 months. I can inch away different things.

In the meantime, they have to make plans on how much they're going to take out of margin, how much they're going to put in prices, how much is going to come out of dollar strengthening, although we're going the other way right now. That's what businesses are doing. And they'll adjust to it, but they're working on it. On investors, investors are not just looking at tariffs.

In the meantime, they have to make plans on how much they're going to take out of margin, how much they're going to put in prices, how much is going to come out of dollar strengthening, although we're going the other way right now. That's what businesses are doing. And they'll adjust to it, but they're working on it. On investors, investors are not just looking at tariffs.

They're looking at the whole mosaic. And what I hear more and more from investors now is there's a lot more uncertainty in USMCA was an agreed trade agreement. They see some of the other things going on with higher education, other things that are a little jarring and surprising coming out of the United States.

They're looking at the whole mosaic. And what I hear more and more from investors now is there's a lot more uncertainty in USMCA was an agreed trade agreement. They see some of the other things going on with higher education, other things that are a little jarring and surprising coming out of the United States.

And what they're starting to think is maybe we started the year being over allocated the dollar in US assets. Maybe we should be rebalancing and reducing our dollar, not eliminating, but reducing our dollar exposure because there's enough unpredictability. And they're asking more questions.

And what they're starting to think is maybe we started the year being over allocated the dollar in US assets. Maybe we should be rebalancing and reducing our dollar, not eliminating, but reducing our dollar exposure because there's enough unpredictability. And they're asking more questions.

Is the institutional framework, is the predictability, which is one of the reasons I wanted to invest in the U.S., is that deteriorating? And that's causing people to change asset allocation.

Is the institutional framework, is the predictability, which is one of the reasons I wanted to invest in the U.S., is that deteriorating? And that's causing people to change asset allocation.

They are already either making plans or starting to act on plans. Here's the issue. And I'll give you a good example. Many folks, companies I talked to, had moved some manufacturing from China to Vietnam. Now we've got a very high tariff on Vietnam. So if we move to Vietnam, do we stay there and hope there'll be a trade agreement, or do we move?