Eight weeks ago, markets were pricing in rate cuts. Now, one of the most well-connected voices in monetary policy circles is floating the possibility of rate hikes by September.
Rob Kaplan, vice chairman at Goldman Sachs and former president of the Federal Reserve Bank of Dallas, said the Fed may need to raise interest rates as soon as September 2026 if inflation remains elevated.
From cuts to hikes in two months flat
As recently as late April, the prevailing market consensus pointed toward at least one rate cut later this year. Traders had positioned accordingly, with risk assets, including crypto, benefiting from the assumption that cheaper money was on its way.
Kaplan’s remarks in mid-June upend that thesis entirely. He emphasized that while the Fed does not need to act immediately in June or July, it must be prepared to take decisive action by September if inflation data continues to show stickiness.
