Goldman Sachs Pushes Back First Fed Rate Cut Call to December 2026

Goldman Sachs has pushed its timeline for Federal Reserve rate cuts back by a quarter, now penciling in the first reduction for December 2026 instead of September. The bank's updated path also places a second cut in March 2027. The shift follows softer April employment data that still points to a resilient labor market. Nonfarm payrolls rose by 115,000 in April, a pace Goldman views as steady enough to ease pressure on the Fed to move quickly. With jobs no longer the immediate worry, the focus is increasingly on inflation. Goldman cited energy cost passthrough as a key factor keeping core PCE inflation nearer 3%—well above the Fed's 2% target—making policy easing harder to justify. Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management, said the Fed is likely to prioritize containing upside inflation risks now that the labor market appears back on track. She added that the FOMC could remove its easing bias in the June statement, a signal that hawkish members are gaining influence. Wall Street forecasts are increasingly split. Wall Street Journal tracking of major institutional calls shows: - No rate cuts in 2026: BNPP, HSBC, JP Morgan, MPA Macro, and RBC - First cut in September 2026: Jefferies, Nomura, TD Securities, and Wells Fargo - Even later starts: Bank of America forecasts July 2027; Morgan Stanley sees January 2027 - Most dovish: Citigroup and MUFG still project 75 basis points of cuts in 2026 Journalist Nick Timiraos noted that roughly half of major forecasters now expect no cuts in 2026, and that cohort has been growing as expectations consolidate. The Fed itself is also showing signs of internal division. At last week's FOMC meeting, three regional presidents voted against the postmeeting statement—not the decision to hold rates, but the forward-guidance language that markets widely read as pointing to future cuts. The 8–4 vote was described as the most divided Fed decision since 1992. If June's statement drops the easing bias, it would reinforce the view that hawks are increasingly in control. Taken together—sticky inflation, a labor market stable enough to reduce urgency, and a more cautious internal Fed dynamic—the case for rate cuts in 2026 is weakening. Disclaimer: The information in this article is for informational and educational purposes only and does not constitute financial advice. Coin Edition is not responsible for losses arising from the use of referenced content, products, or services. Readers should exercise caution before taking action related to any company mentioned.