Goldman Delays Fed Rate Cut Forecast

Sticky inflation just bought the Federal Reserve more time.

Goldman Sachs says it has pushed back its forecast for the next two US interest-rate cuts by one quarter, moving its expectations to December 2026 and March 2027. The shift underscores a message markets keep confronting: inflation has not cooled enough to give the central bank a clear path to easier policy.

The revised timeline matters because Fed rate cuts ripple through nearly every part of the economy, from borrowing costs and mortgage rates to stock valuations and business investment. When a major Wall Street bank extends that timeline, it signals that hopes for faster relief from high rates may run ahead of the data.

Goldman’s new forecast points to a simple problem for the Fed: inflation still has enough heat to keep rate cuts on hold longer than many expected.

Reports indicate the change reflects a broader reassessment of how quickly price pressures can fade. If inflation stays stubborn, policymakers will likely keep rates elevated to avoid loosening conditions too soon. That stance could test consumers and businesses that have waited for lower financing costs, while reinforcing the Fed’s focus on inflation over short-term market demands.

What happens next will turn on incoming inflation and labor data, along with how Fed officials interpret them. If price growth finally cools in a sustained way, the case for cuts could strengthen. If it does not, expectations may shift again — and that matters because every delay keeps pressure on households, companies, and investors planning for a cheaper-money era that still has not arrived.