Kaplan on Rate Hikes, Warsh at Jackson Hole

• Economy shows strength in AI/infrastructure, but weakness in housing, autos, and low-income consumer segments.
• Fed's July rate hold was the 'absolutely right decision'; future decisions should be data-dependent, avoiding rigid forward guidance.
• Long-end of the Treasury curve is struggling with supply/demand dynamics due to large government deficits, representing a structural shift.
• A 'great earnings story' is unfolding, driven by AI adoption and productivity improvements, making him more bullish on stocks than bonds for the next year.

Robert Kaplan, Vice Chairman of Goldman Sachs and former Dallas Fed President, provides a nuanced view of the economy, highlighting strength in AI and infrastructure but sluggishness in other sectors. He believes the Fed made the right decision in July by holding rates and should focus on explaining its decisions rather than rigid forward guidance. Kaplan expresses concern over long-term bond market dynamics due to large fiscal deficits.