Goldman Sachs Delays Fed Rate Cuts Forecast to June 2027 and December 2027

According to Goldman Sachs Research, the Federal Reserve is increasingly likely to keep interest rates unchanged through the rest of 2026 as economic conditions remain stronger than previously expected. The bank has pushed back its forecast for the final two rate cuts, now expecting the Fed to lower rates in June 2027 and December 2027, compared with its prior forecast of December 2026 and March 2027.

Goldman attributes the revised outlook to stronger-than-expected economic data, including resilience in the labor market and consumer spending. The firm expects the unemployment rate to reach approximately 4.4% by year-end, a level it views as too low to justify accelerated rate cuts. Core inflation is forecast to stay above 3% through 2026 before gradually approaching the Fed's 2% target in 2027. Goldman believes the Federal Open Market Committee will remain cautious until inflation shows more sustained progress.