Former Dallas Fed President Kaplan Says Rate Hike Possible by September
If the Fed acts by fall, it would mark a significant policy reversal after months of holding rates steady — with implications for federal borrowing costs and congressional budget projections.
Robert Kaplan, vice chairman at Goldman Sachs and former president of the Federal Reserve Bank of Dallas, said publicly on June 18, 2026, that the Federal Reserve may need to raise interest rates as soon as September if inflation data does not cool over the summer months. Kaplan made the remarks in an interview on Bloomberg's 'The China Show,' according to Bloomberg News reporting dated June 18, 2026.
Kaplan stated that the Fed will face pressure to deliver price stability if consumer price index and related inflation prints remain elevated through the summer. He indicated there is a risk of more than one rate increase, though he did not specify a precise terminal rate figure in the Bloomberg reporting. Kaplan served as Dallas Fed president from 2015 to 2021 and currently holds the vice chairman role at Goldman Sachs Group Inc., according to Goldman Sachs public disclosures.
A September rate hike, if it materializes, would carry direct consequences for federal fiscal policy. The Congressional Budget Office's most recent baseline projections account for current interest rate assumptions; any upward revision in the federal funds rate would increase net interest costs on the national debt, which the CBO projected at $892 billion for fiscal year 2025 in its February 2026 Budget and Economic Outlook. An increase in the federal funds rate raises the yield environment against which Treasury securities are refinanced.
The Federal Open Market Committee, which sets the federal funds rate, is composed of the seven members of the Federal Reserve Board of Governors and five of the twelve regional Federal Reserve Bank presidents on a rotating basis. The FOMC's next scheduled policy meetings are set for July 28-29 and September 16-17, 2026, according to the Federal Reserve's published calendar. The Fed has held rates steady at its most recent meetings; the precise current target range would be confirmed in the FOMC's most recent statement, available at federalreserve.gov.
What remains unknown is whether inflation data released between now and the September meeting will meet the threshold Kaplan described as requiring action. The Bureau of Labor Statistics publishes the Consumer Price Index monthly; the July and August CPI reports, scheduled for release in August and September 2026 respectively, would be the primary data points the FOMC would weigh before its September 16-17 meeting. The minutes of that meeting, released three weeks afterward under standard Fed procedure, would document the internal deliberations.