Goldman Sachs just took the rate-cut hopium off the table. The bank’s economists revised their Federal Reserve outlook on June 7, eliminating all expected interest rate cuts for 2026 and pushing their easing timeline deep into next year.
The new forecast calls for two 25-basis-point reductions in June and December 2027, replacing the previous expectation of cuts in December 2026 and March 2027. And even that pushed-back timeline comes with a caveat: Goldman assigns only a 30% probability to those 2027 cuts actually happening.
Strong jobs data killed the rate-cut narrative
The catalyst here is straightforward. May’s employment figures came in stronger than anticipated, painting a picture of a labor market that refuses to cool down despite the Fed holding rates at elevated levels.
Goldman isn’t alone in reading the tea leaves this way. Multiple major brokerages have similarly pushed back or outright scrapped their 2026 easing expectations.
