Goldman's Kaplan on Fed's Warsh and AI Capex Boom

• Kevin Warsh is expected to adopt a more neutral communication style, focusing on policy philosophy and less on future rate predictions, encouraging robust internal debate.
• Kaplan identifies a 'historic capex boom' in the US, driven by AI infrastructure, data centers, and power, which creates demand for materials and labor, contributing to inflationary dynamics.
• The AI adoption phase is seen as disinflationary due to improved productivity, while the Fed must remain committed to its 2% inflation target and be prepared to act if inflation remains sticky.

Robert Kaplan, Goldman Sachs vice chair, discusses the potential policy approach of new Fed Chair Kevin Warsh, emphasizing a shift towards less prognostication and more internal debate. He highlights a 'historic capex boom' driven by AI infrastructure as a key economic factor, creating both inflationary pressures from demand for materials and labor, and disinflationary forces from productivity gains. Kaplan stresses the Fed's commitment to a 2% inflation target.