Goldman Sachs Predicts Fed to Hold Rates in January, Potential Cuts in 2026

Fed Likely to Hold Rates at January Meeting

According to the latest report from Goldman Sachs, the upcoming Federal Open Market Committee (FOMC) meeting in January is expected to leave interest rates unchanged. This decision reflects the Fed's cautious approach amid the current economic landscape, with market participants anticipating no major shifts in monetary policy.

Policy Consensus Builds

Goldman's analysis suggests that Fed Governors Waller and Bowman are likely to support the decision to keep rates steady, signaling growing consensus among policymakers. However, Vice Chair Stephen Miles may dissent, highlighting ongoing differences within the committee.

Potential Rate Cuts in 2026

While the current stance remains unchanged, Goldman Sachs forecasts the possibility of a rate-cutting cycle beginning in 2026. The firm anticipates the first cut may occur in June, with a second reduction likely later in the year, pointing to a potential shift toward a more accommodative monetary policy stance.