When people ask me about my job, I often say I have the best job at Goldman Sachs, and that's honestly no joke.

And one of the things I love the most about my job is that it gives me the chance to speak to some of the most interesting and insightful people in business economics and finance.

And today's guest certainly qualifies.

Rob Kaplan ran the Dallas Fed from 2015 to 2021. Before that, he was a

professor at Harvard Business School and the global co-head of investment banking here at Goldman

Sacks. Earlier this year, he rejoined Goldman Sachs as vice chairman, so I am proud to call him my colleague

again. Today, Rob is joining me from our Dallas office to speak about the Fed's rate cutting cycle,

the interplay between monetary and fiscal policy, and what investors might be missing about this

unique economic moment. Rob, thanks for being here. Great to be here with you, Allison.

The Fed is continuing its cutting cycle. As we all know, it brought down the Fed funds rate by

another 25 basis points last week. And it continues

to try to walk this tightrope of bringing down inflation without tanking the economy. We'll get your

views on what could be ahead. But let me first ask how good of a job you think the Fed has done so

far in orchestrating a soft landing. It's done a good job in orchestrating a soft landing.

Part of the thing that's helped them orchestrate that soft landing is that fiscal policy

has been dramatically more accommodative, more stimulative than we're accustomed to.

We've gone from pre-COVID 70% of GDP to over 100% of GDP debt of the U.S.

government, but people have to realize post-COVID, 21, 22, and 23, we've had outsized fiscal spending,

particularly these very large, directed programs like the Inflation Reduction Act and Infrastructure Act.

That has helped the Fed. Now, on the other hand, it's caused the Fed to go higher than they thought

that need to, five and a quarter, five and a half. It's caused them to stay there longer,

and it's been stickier and slower for them to cut than they would have otherwise.

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