Goldman Sachs no longer expects a Fed interest rate cut this year

Stronger-than-expected jobs data pushed the bank to scrap its 2026 easing forecast entirely, with cuts now penciled in for 2027 at best.

Share

Add us on Google by Editorial Team Jun. 8, 2026

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.

Advertisement

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.

What changed from Goldman’s earlier outlook

To appreciate how dramatic this pivot is, consider the trajectory of Goldman’s forecasts. Earlier forecasts, made mid-2025, anticipated multiple interest rate cuts beginning in late 2025 and extending into 2026, with the federal funds rate estimated to fall between 3% and 3.25%. The bank had subsequently revised to cuts beginning in December 2026, but that timeline is now effectively dead. The shift from “cuts starting December 2026” to “maybe two cuts in 2027, with a 30% chance” represents a fundamental reassessment of how long rates will stay elevated.

What this means for crypto and risk assets

A prolonged period of elevated rates means tighter liquidity conditions across financial markets. Capital that might otherwise flow into speculative assets, including crypto, faces competition from risk-free yields that remain attractive.

Goldman’s revision is still in the early stages of being digested by the broader market, with no crypto-specific news outlets having yet reported on the announcement. As more traders and portfolio managers incorporate this hawkish shift into their models, repositioning could create volatility across crypto and traditional risk assets alike.

For investors sitting on leveraged positions or concentrated bets on rate-sensitive sectors, this is a moment to reassess. In crypto, that translates to potential headwinds for DeFi protocols whose token valuations are partially built on assumptions about future liquidity conditions.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.