Goldman Sachs pushes back Fed rate cut forecast to once in 2026
Updated
Updated · Barron's · May 11
Goldman Sachs pushes back Fed rate cut forecast to once in 2026
14 articles · Updated · Barron's · May 11
Chief US economist David Mericle shifted two quarter-point cuts to December 2026 and March 2027, from September and December 2026 previously.
He said the war in Iran would lift energy costs and keep the Fed's preferred inflation gauge nearer 3% than 2% through the year.
Mericle said only softer inflation and a weaker labour market would justify any cut this year, while CME FedWatch showed traders saw a 72% chance of no 2026 cut.
Why does the market expect zero rate cuts when the Fed’s own forecast still signals one is coming?
Can the Fed fight war-driven inflation with interest rates without triggering a US recession?