In this episode of the Goldman Sachs Exchanges podcast, Rob Kaplan discusses the Federal Reserve's rate-cutting cycle and the implications of the recent US election. He points out that while the Fed has effectively managed a soft landing for financial markets and wealthier individuals, many lower-income workers are still feeling the pinch of inflation on their purchasing power. Kaplan predicts that the new administration's potential policy changes—ranging from regulations and immigration to energy transition—will lead to significant shifts in the economy, complicating the Fed's future rate-cutting plans. He recommends a cautious, risk-aware approach for the Fed, urging them to closely monitor the evolving economic situation before making any firm decisions. For investors, he suggests focusing on the broader structural changes, especially those affecting the labor market and tariffs, rather than getting caught up in any single policy.
