Goldman Sachs has revised its outlook for U.S. interest rate cuts, pushing back its expectations for easing by the Federal Reserve. In a note released on Sunday, the bank said it now anticipates two 25-basis-point rate cuts in June and September 2026, later than its previous forecast for moves in March and June.
The adjustment comes despite softer U.S. nonfarm payrolls data and reflects a combination of a gradually cooling labor market, stronger-than-expected economic growth, and diminishing effects from tariffs. Goldman said these factors together justify a more patient approach from the Fed.
Following the latest jobs report, Goldman expects policymakers to wait until mid-2026 before cutting rates, as inflation continues to ease toward the Fed’s target and employment conditions stabilize. The bank now sees the Fed funds rate ending 2026 in a range of 3.0% to 3.25%.
Goldman also lowered its assessment of recession risk, cutting its 12-month probability estimate to 20% from a prior 30%. According to the firm, economic momentum in 2025 showed “meaningful progress,” although this improvement was partly obscured by a temporary boost from tariffs. While the labor market has shown signs of stabilization, Goldman cautioned that it remains vulnerable to further softening.
