Goldman Sachs has scrapped its forecast for any Federal Reserve rate cuts in 2026, pushing its timeline for monetary easing into 2027. The catalyst: a May jobs report so strong it made the case for patience at the Fed almost impossible to argue against.
The bank now expects two 25-basis-point cuts in June and December 2027. That replaces a prior outlook calling for reductions in December 2026 and March 2027, marking the third time this year Goldman has delayed its rate-cut timeline.
The jobs number that changed everything
May’s nonfarm payroll data landed like a cold splash of water on rate-cut optimists. The US economy added 172,000 jobs, roughly double the 80,000 to 85,000 that economists had penciled in. The unemployment rate held steady at 4.3%.
The Fed’s target interest rate range currently sits at 3.50% to 3.75%, following a series of reductions in late 2025. Those cuts were made when the economic picture looked softer. The picture has since changed, and Goldman’s revision reflects that shift in a fairly dramatic way.
