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Robert Kaplan: latest market views
Goldman Sachs
Summary
Vice chairman of Goldman Sachs and member of its Management Committee, who previously served as president and CEO of the Federal Reserve Bank of Dallas (2015-2021) and as a Harvard Business School professor.
Chorus has 32 views from Robert Kaplan across 3 episodes on Bloomberg Surveillance and Bloomberg Talks since October 27, 2026.
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US economy is split: AI and defense strong, while housing, autos and low-income consumers are sluggish.
Kaplan characterises the economy by sector. Anything related to AI or defense spending is super strong, while housing, autos, and serving low- to moderate-income consumers are sluggish. He frames the strength as concentrated rather than broad-based, which he links to the shift away from a consumer-led economy.
“this economy is... If it's anything AI related or defense spending related, super strong. If it's related to housing, autos, serving low moderate income consumers, sluggish.”at 3:45
Bloomberg Talks: Goldman Sachs Vice Chair Robert Kaplan Talks Fed Meeting ·
AI infrastructure & data centers
The AI infrastructure boom's huge capital demand is pushing up interest rates.
Kaplan describes the current economy as having a historic demand for capital to fund the AI infrastructure boom, which covers data centers, power, and chips. He says this demand is showing up in rates. He describes this build-out as narrow compared with the broad consumer-led economy of past decades, so its effects on rates are concentrated rather than broad.
“While that's going on, you got a historic demand for capital to fund this AI infrastructure boom. And we're seeing that play out in rates.”at 4:00
Bloomberg Talks: Goldman Sachs Vice Chair Robert Kaplan Talks Fed Meeting ·
Most US inflation is structural rather than cyclical, and the economy is not overheating.
Kaplan argues that the bulk of current inflation may be structural rather than cyclical. Because of this, he does not believe the economy is overheating. This matters for policy because a cyclical overheating would justify faster rate increases, which he says he would support in that case.
“And on the inflation side, you got to say some of this inflation and maybe the bulk of it is structural, not necessarily cyclical. I don't know that there's an overheating of this economy.”at 4:12
Bloomberg Talks: Goldman Sachs Vice Chair Robert Kaplan Talks Fed Meeting ·
Elevated diesel prices feed into broad inflation because diesel is embedded in about 50 other items.
Kaplan explains that when diesel goes up, it is embedded in around 50 other items, so broad-based inflation is not a surprise while diesel is this elevated. He concludes that the inflation pressure from diesel is a supply-side cost pass-through rather than evidence of overheating demand.
“When diesel goes up, turns out it's embedded in 50 other items. And so a broad [-based] inflation is not a surprise when diesel is this elevated.”at 5:29
Bloomberg Talks: Goldman Sachs Vice Chair Robert Kaplan Talks Fed Meeting ·
Raising rates now could slow sluggish sectors without curbing diesel-driven inflation, so hikes should be deliberate.
Kaplan argues the Fed faces a trade-off. If diesel prices do not come down, raising the fed funds rate too far and too fast could slow parts of the economy that are already sluggish, such as housing and autos, while making no dent in inflation that is driven by diesel. His preference is to skip the hike at this meeting and raise rates deliberately later, rather than moving fast. He would move faster only if the inflation were cyclical overheating.
“But the issue is I could raise the fed funds rate. If diesel does not come down, the impact of raising too far too fast may be to slow already sluggish parts of the economy, and it may not make a dent in inflation.”at 5:40
Bloomberg Talks: Goldman Sachs Vice Chair Robert Kaplan Talks Fed Meeting ·
Enterprise AI adoption & AI software
AI adoption is early; he is optimistic many use cases will work, with lessons coming over the next year.
Kaplan separates the AI build-out, which is already under way, from the adoption wave, which he describes as early. He says he is very optimistic about how many adoption use cases will work, but expects to learn a lot over the next year about which ones succeed.
“And then you've got the adoption wave, but we're early in the adoption wave. I'm very optimistic about how many of these adoption use cases are gonna work, but we're gonna learn a lot over the next year.”at 6:56
Bloomberg Talks: Goldman Sachs Vice Chair Robert Kaplan Talks Fed Meeting ·
AI adoption will shift job mix: fewer programmers, more client-facing roles; narrowly defined jobs are at risk.
Kaplan says that he sees this among clients, in Goldman's own business, and among small businesses. He declined to comment on any single company. He expects fewer programmers, with more people covering clients, building relationships, and focusing externally. He argues that individual workers who define their jobs narrowly will find it tough, and that they will need to be flexible and able to read, write, communicate, debate, and build relationships.
“I think the AI adoption phase will change the mix of businesses... There are going [to] be fewer programmers, but I think you're going to have more and more people covering clients, building relationships, externally focused.”at 8:11
Bloomberg Talks: Goldman Sachs Vice Chair Robert Kaplan Talks Fed Meeting ·
Midterm results are largely priced in; expects balanced, not absent, regulation over the next couple of years.
Kaplan says most business people and the markets have already priced in the midterm outcome. The part they do not know is whether regulation will change. He does not think a change in Congress will alter tariffs or immigration policy, but he expects a couple more years of balanced regulation. He argues that an economy needing more growth and highly leveraged to debt needs balanced regulation to help raise productivity.
“most business people and certainly the markets have already priced in the outcome... we're gonna have not no regulation, but balanced regulation.”at 9:20
Bloomberg Talks: Goldman Sachs Vice Chair Robert Kaplan Talks Fed Meeting ·
Government leverage is the biggest tail risk; debt-to-GDP levels demand a credible fiscal plan to bend deficits.
Kaplan names government leverage as his biggest tail risk, starting with governments around the world and citing France. Governments are historically highly leveraged, and COVID added a lot more leverage. With little workforce growth, the economy is putting all its chips on productivity growth. He worries that policymakers need a fiscal approach that shows how deficits as a share of GDP will be bent, because the long end of the curve keeps backing up and squeezing housing.
“the biggest tail risk I see still starts with governments around the world... Government's historically highly leveraged. And in the aftermath of COVID, we got a lot more leverage, and we don't have workforce growth.”at 11:16
Bloomberg Talks: Goldman Sachs Vice Chair Robert Kaplan Talks Fed Meeting ·
US needs roughly 1 to 2 million immigrants a year; unfilled jobs are slowing growth.
Kaplan argues the US needs to revisit immigration and needs [one to two million] immigrants a year. He points to many open jobs that are not being filled, which he says is slowing growth in an economy that needs more growth. He ties this to the broader need for productivity and labour-force growth.
“I would argue we need to relook at immigration. We need [one to two million] a year in immigration. There are a lot of open jobs that are not getting filled, and we're... It's slowing growth.”at 12:28
Bloomberg Talks: Goldman Sachs Vice Chair Robert Kaplan Talks Fed Meeting ·
Entitlement reform must be on the menu; entitlement overspending drove most of the 2026 deficit miss.
Kaplan argues that entitlement reform has to be on the menu because entitlements are such a big part of the budget. He cites the big miss on the 2026 budget deficit, where he believes about $250 billion came from an entitlement surprise and roughly another $100 billion from higher interest expense. He concludes the government needs a menu of fiscal options and has to start.
“entitlement reform is gonna be on the menu also has to be because it's such a big part of the budget. And you notice the big miss on the budget deficit in 2026, I think 250,000,000,000 of it was entitlement surprise.”at 12:56
Bloomberg Talks: Goldman Sachs Vice Chair Robert Kaplan Talks Fed Meeting ·
Treasuries no longer act as a cyclical diversifier; rising debt makes investors reluctant to own them, a warning sign.
Historically, when the economy slowed, stocks fell and Treasuries rallied. Kaplan says that has not happened for the last two years, although there was a brief flight to quality in the last two weeks. He attributes this to debt levels, which make people more reluctant to own Treasuries. He also worries that the long end of the curve keeps backing up, which is squeezing housing. He calls this a dangerous development and a red warning light that should prompt action on fiscal policy.
“where I think the treasury curve is not acting right now like a cyclical diversifier... We're not seeing that. I think we're getting to a level of debt where people are more reluctant now to own treasuries. That's a dangerous thing.”at 13:52
Bloomberg Talks: Goldman Sachs Vice Chair Robert Kaplan Talks Fed Meeting ·
Markets now price AI deals by business model and capital structure, charging more for sub-investment-grade debt.
Kaplan says that even in large AI transactions, the market has started to differentiate based on business models and capital structure over the last few weeks. Companies need enough equity and limited debt so the model works in a downside case. He says the market is starting to charge more for issuers below investment grade, including single-B, and he views this as healthy. Capital is still harder to raise, and concessions have widened a little, but he expects good access.
“the market started to differentiate based on business models and on capital structure. I think that's a healthy development.”at 23:46
Bloomberg Surveillance: Bloomberg Surveillance TV: October 27th, 2026 ·
AI infrastructure & data centers
Hyperscalers are raising enough equity to avoid excessive leverage, which is prudent.
Kaplan says hyperscalers have decided to monitor their capital structure and debt-to-equity ratio. He says they have decided to raise enough equity so they do not become too highly leveraged. Lisa Abramowicz calls it responsible and prudent, and Kaplan agrees. The point is that the infrastructure buildout is being funded with a more balanced mix of equity and debt.
“I think they've decided to monitor their capital structure and their debt to equity... to make sure that they've raised enough equity so they don't get too highly leveraged.”at 25:32
Bloomberg Surveillance: Bloomberg Surveillance TV: October 27th, 2026 ·
Token and compute demand will ramp, but prices for certain token types will fall.
Kaplan expects a big continued ramp in token demand and compute demand. He expects prices for certain types of tokens to decline, and he sees that as a healthy natural development. He argues that firms should be judged by whether they are merchants selling compute, or by whether they use it to monetize their own customer revenue. Model makers should also be assessed on how dependent they are on compute pricing and how speculative that is.
“We think there's going to be a big ramp up continued in token demand and demand for compute, but the pricing for certain types of tokens will probably decline.”at 26:52
Bloomberg Surveillance: Bloomberg Surveillance TV: October 27th, 2026 ·
Enterprise AI adoption & AI software
Companies have learned from AI use cases; more tangible benefits will show up over the next year.
Kaplan says that most companies started trying 15 to 20 AI use cases in earnest about a year ago. Some work and some don't, and firms are learning how to use and segment tokens. He concedes many companies say they have not yet seen tangible benefits. But his view, based on Goldman's experience with clients, is that more and more benefits will be realized over the next year as companies learn.
“And I think even though many companies say we haven't yet seen tangible benefits, I think actually, you're gonna see more and more benefits realized over the next year as companies learn, and that's been our experience.”at 28:18
Bloomberg Surveillance: Bloomberg Surveillance TV: October 27th, 2026 ·
AI lets firms grow revenue 50% with the same headcount, shifting the mix of people rather than cutting them.
Kaplan says AI is giving CEOs more confidence to plan for 30-50% higher revenues. Firms will redeploy existing people or hire new ones to cover more clients, and they may cut some internal functions. He expects revenue to be 50% higher in five years with the same number of people, maybe not fewer people but a different mix. He argues that face-to-face relationship and flexibility skills will become more valuable, and that people who view their careers narrowly will face more challenges.
“...five years from now, we're gonna have 50% more revenue with the same number of people. Maybe not less people, but a different mix of people.”at 28:32
Bloomberg Surveillance: Bloomberg Surveillance TV: October 27th, 2026 ·
AI infrastructure & data centers
State data-center moratoriums are about fair terms and will be resolved, not a fundamental block.
Kaplan says that several states, including Texas, have imposed moratoriums on data centers. He reads this as an effort to create a more level playing field on behind-the-meter power, sharing of tax revenue, water usage and other deal terms. He says this infrastructure concern will get resolved. He separates it from the separate concern about jobs and the dangers of AI models.
“there's the moratorium in number states, including the one I live in Texas... I think that's a little bit more trying to create a more level playing field on behind the meter power, sharing of tax revenues, water usage... I think that will get resolved.”at 29:48
Bloomberg Surveillance: Bloomberg Surveillance TV: October 27th, 2026 ·
Inflation broadening is structural from oil and diesel, not excess demand; the economy is mixed.
Kaplan says the debate is whether inflation is supply or demand driven, and cyclical or structural. He says AI-related and defense-related activity is strong, while housing, autos and lower-to-moderate-income consumer segments are sluggish. He argues the economy is more mixed than the headline suggests. He also says that if the oil and diesel spike could be undone, the broadening of inflation would look more like a structural change than excess demand.
“If it's AI related, it's strong. If it's defense spending related, very strong. If it's housing, autos, serving low moderate income consumers, sluggish.”at 31:33
Bloomberg Surveillance: Bloomberg Surveillance TV: October 27th, 2026 ·
Fed can afford to skip October; hiking too far too fast is the bigger risk.
Kaplan says the Fed has the luxury of waiting one meeting. He distinguishes strategic errors, which are delays that take a year or two to fix, from tactical errors, and says waiting one meeting is not a strategic mistake. He says the Fed's real worry is hiking too far, too fast, which would slow sluggish segments of the economy while diesel-driven inflation stays unresolved and the Fed struggles on both ends of its dual mandate. If the Fed skips October, it would be because it wants to understand these crosscurrents, not because it is done hiking.
“I think they've got the luxury of waiting one meeting... Strategic error is you delay in a way that it takes a year or two to to fix it.”at 32:46
Bloomberg Surveillance: Bloomberg Surveillance TV: October 27th, 2026 ·
Growth is strong only in AI and defense; housing, autos and low-income consumers are sluggish, so growth is narrow.
Kaplan describes a two-speed economy. AI- and defense-related activity is super strong, while housing, autos and lower-to-moderate income consumers are sluggish. He notes that the AI push is narrow, focused on data centers, power and chips, unlike the consumer-led economy of past decades. Growth therefore depends on productivity and balanced regulation.
“If it's anything AI related or defense spending related, super strong. If it's related to housing, autos, serving low moderate income consumers, sluggish.”at 4:28
Bloomberg Surveillance: Previewing the Fed Meeting and AI IPOs ·
Much of current US inflation is structural rather than cyclical; the economy is not overheating.
Kaplan says the bulk of inflation may be structural, not cyclical, and he does not believe the economy is overheating. He also says the Fed should debate how much inflation comes from supply and how much from demand, and that the data will not settle it as well as talking to companies.
“some of this inflation and maybe the bulk of it is structural, not necessarily cyclical. I don't know that there's an overheating of this economy.”at 4:58
Bloomberg Surveillance: Previewing the Fed Meeting and AI IPOs ·
Elevated diesel prices are feeding broad inflation, since diesel is embedded in many other goods and services.
Kaplan argues diesel is embedded in roughly 50 other items, so a broadening of inflation is unsurprising while diesel is this elevated. He ties diesel's persistence to the Fed's dilemma: raising rates would not bring diesel-driven inflation down.
“When diesel goes up, turns out it's embedded in 50 other items. And so a broadening of inflation is not a surprise when diesel is this elevated.”at 6:12
Bloomberg Surveillance: Previewing the Fed Meeting and AI IPOs ·
Fed should move deliberately; raising rates too far, too fast would hurt sluggish sectors without curbing inflation.
Kaplan argues that if diesel-driven inflation does not come down, rapid hikes would slow already sluggish parts of the economy and would not make a dent in inflation. He says the Fed should act deliberately, and only move faster if this were a cyclical overheating.
“I could raise the Fed funds rate. If diesel does not come down, the impact of raising too far too fast may be to slow already sluggish parts of the economy, and it may not make a dent in inflation.”at 6:24
Bloomberg Surveillance: Previewing the Fed Meeting and AI IPOs ·
Enterprise AI adoption & AI software
Enterprise AI adoption is early; Kaplan is optimistic many use cases will work, learned over the next year.
Kaplan distinguishes the current AI push, which is narrow and about building data centers, power and chips, from the coming adoption wave. He says the adoption wave is early, and he is very optimistic about how many adoption use cases will work, though the economy will learn a lot over the next year.
“And then you've got the adoption wave, but we're early in the adoption wave. I'm very optimistic about how many of these adoption use cases are gonna work, but we're gonna learn a lot over the next year.”at 7:33
Bloomberg Surveillance: Previewing the Fed Meeting and AI IPOs ·
AI adoption will shrink programming roles while client-facing, relationship-building jobs grow; narrowly defined jobs will suffer.
Kaplan says the AI adoption phase will change the mix of businesses and employment. Microsoft has many programmers, and there will be fewer of them, but more people covering clients and building external relationships. He says workers who define their jobs narrowly will struggle and need to be more flexible.
“The issue at Microsoft, they have lots of programmers. There are gonna be fewer programmers, but I think you're gonna have more and more people covering clients, building relationships, externally focused.”at 9:03
Bloomberg Surveillance: Previewing the Fed Meeting and AI IPOs ·
Midterm outcome is priced in; the open question is whether Congress changes regulatory policy.
Kaplan says business people and markets have already priced in the midterm outcome. The unknown is whether a Congress change would alter regulation. He does not expect tariffs or immigration policy to change, and hopes for a couple more years of balanced regulation to support growth and productivity.
“So like a lot of things, most business people and certainly the markets have already priced in the outcome.”at 10:03
Bloomberg Surveillance: Previewing the Fed Meeting and AI IPOs ·
Governments' high leverage is the biggest tail risk; the US and others must show how they will bend deficits.
Kaplan says governments are historically highly leveraged and COVID added more leverage, with no workforce growth to offset it. Since the economy is relying on productivity growth, he worries that debt-to-GDP levels are a risk. He says the US, like others, needs a fiscal plan showing how deficits will be bent as a share of GDP.
“the biggest tail risk I see still starts with governments around the world and witness what's going on in France. Government's historically highly leveraged.”at 11:59
Bloomberg Surveillance: Previewing the Fed Meeting and AI IPOs ·
Long-end Treasury yields keep rising, squeezing housing and the broader economy.
Kaplan worries about the long end of the curve, which keeps backing up. He says this is squeezing housing, and in another part of the conversation he notes that housing is among the sluggish parts of the economy, along with autos and lower-income consumers.
“Because I worry about the long end of the curve. That it keeps backing up, and that's squeezing housing.”at 12:34
Bloomberg Surveillance: Previewing the Fed Meeting and AI IPOs ·
US needs one to two million immigrants a year to fill open jobs and restore growth.
Kaplan says a lot of open jobs are not being filled and that this is slowing growth. He argues immigration policy should be relooked at, to bring in roughly one to two million people a year, as part of a set of steps to grow faster.
“We need [one to two] million a year in immigration. There are a lot of open jobs that are not getting filled, and we're... It's slowing growth.”at 13:12
Bloomberg Surveillance: Previewing the Fed Meeting and AI IPOs ·
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- Bloomberg Surveillance · 2 episodes
- Bloomberg Talks · 1 episode
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