Warsh

Why Markets May Be Pricing in Too Many Fed Rate Hikes

Rob Kaplan, Warsh, Alison Nathan, Robert Kaplan

On September 22, 2026, Goldman Sachs Exchanges featured former Dallas Fed President Robert Kaplan analyzing the Federal Reserve's first rate hike in three years under new Chairman Kevin Warsh, a move driven by persistent 3% inflation rather than market speculation. Kaplan highlighted the Fed's cautious outlook, noting that conflicting economic forces—specifically booming AI infrastructure versus sluggish housing markets—support a decision to pause further increases until December despite Treasury yields exceeding 5%. While maintaining that FOMC members operate free from political pressure, Kaplan warned that a prolonged supply shock risks broadening inflation if economic data such as PCE and CPI indicators in October show no sign of firming.