Goldman Shifts Rate Forecast Amid Evolving Economic Landscape
Goldman Sachs has updated its outlook for U.S. monetary policy, now projecting two 25-basis-point rate cuts by the Federal Reserve in September and December 2026—marking a delay from earlier expectations of mid-year reductions.
This shift highlights sustained inflationary pressures and resilient economic growth, challenging previous assumptions of an earlier pivot toward easing.
What’s Driving the Delay?
- Core inflation remains above target, limiting policy flexibility
- Strong labor market continues to fuel consumer spending
- Business investment and industrial output show no signs of sharp slowdown
Analysts note that with inflation still persistent, the Fed is likely to maintain a cautious stance to avoid reigniting price pressures. Upcoming data on employment and personal consumption expenditures will be critical in shaping the final decision timeline.