Goldman Sachs Delays Fed Rate-Cut Forecast to Dec. 2026

Goldman Sachs pushed back its forecast for the Federal Reserve’s next two rate cuts to December 2026 and March 2027. The bank’s U.S. economics team cited persistent inflation and projected that core Personal Consumption Expenditures inflation will stay near 3% through 2026 as higher energy costs feed into other prices.

At the April 29 Federal Open Market Committee meeting the Fed kept the federal funds rate at a 3.50% to 3.75% range and described economic conditions as stable across most districts. The statement produced four dissents, the most at an FOMC meeting since 1992.

Core PCE removes food and energy to show underlying inflation trends. Energy cost pass-through refers to higher energy prices raising input and service costs, which can keep core inflation elevated even if some items moderate.

Goldman’s timeline revision follows an International Monetary Fund projection that core PCE will return to 2% only in early 2027.

Lindsay Rosner of Goldman Sachs Asset Management wrote that the FOMC “could well feel compelled to remove the easing bias from its next post-meeting statement in June, which would suggest the hawks are gaining the upper hand on the committee.”

Goldman economists wrote that cooler monthly inflation readings and weaker employment data must appear before policymakers move to cut rates.

Futures pricing places strong odds on policymakers holding rates at the June meeting; market-implied probabilities put the chance of no change at about 93.4%. Traders are watching upcoming PCE data and the June 17 FOMC decision for further direction.

Analysts expect a delay in rate cuts to tighten liquidity and strengthen the dollar, reducing flows into risk assets. They note speculative assets and many altcoins often face heavier selling in tighter conditions, and some investors may turn to Bitcoin as an inflation hedge.