Goldman Sachs pushes Fed rate-cut forecast to 2027 on strong US jobs data

The bank now sees zero rate cuts in 2026 after May payrolls blew past expectations by more than double

Share

Add us on Google by Editorial Team Jun. 9, 2026

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%.

Advertisement

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.

Goldman also bumped up the probability it assigns to the Fed actually hiking rates, raising that scenario to 20% from a previous 10%.

Why inflation keeps ruining the rate-cut party

This isn’t the first time Goldman has moved the goalposts on rate cuts in 2026. It’s the third. Each prior delay was driven by the same persistent villain: inflation that refuses to cooperate with the Fed’s 2% target.

Cutting rates while prices remain sticky risks reigniting the very problem the central bank spent years fighting. But keeping rates elevated for too long risks eventually cracking the labor market and triggering a recession.

What this means for crypto and risk assets

Goldman’s revised forecast effectively removes one of the bullish catalysts that crypto traders had been banking on for the second half of 2026. If the market had been pricing in rate cuts this year, that pricing now needs to adjust.

The 20% probability Goldman now assigns to rate hikes is perhaps the more alarming signal for crypto investors. Even if hikes remain a tail scenario, the fact that a major bank is taking the possibility seriously enough to double its probability estimate suggests the risk environment has shifted.

Sustained higher rates also affect the crypto ecosystem through less obvious channels. Venture capital funding for blockchain startups tends to dry up when capital is expensive. DeFi yields become less competitive against risk-free rates.

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