Goldman Pushes First Fed Rate Cut to June 2027 After Blowout Jobs Report

Goldman Sachs has pushed back its outlook for Federal Reserve rate cuts, now projecting the first reduction will come in June 2027 rather than December 2026. The shift follows a stronger-than-expected May 2026 U.S. employment report. Nonfarm payrolls rose by 172,000, roughly double Wall Street forecasts of 80,000 to 89,000. The unemployment rate was unchanged at 4.3%. David Mericle, Goldman's chief U.S. economist, said the firm now expects two 25-basis-point cuts in 2027—one in June and another in December—for a total of 50 basis points of easing. Under its prior view, Goldman had anticipated cuts in December 2026 and March 2027, meaning its updated path removes any easing from 2026. Goldman also raised its estimated probability of rate hikes to 20% from 10%. Its terminal-rate forecast remains 3.0% to 3.25%. The Fed's current policy rate stands at 3.50% to 3.75%, where it has remained since the last round of cuts in late 2025. Nomura has also argued the Fed may deliver no cuts through 2026, a stance it held even before the May jobs data. For crypto and other risk assets, the key downside scenario is the one Goldman assigns a 20% chance: rate hikes. A move above 3.75% would likely tighten financial conditions and could draw capital away from speculative markets.