Goldman Sachs Delays Fed Rate Cut Timeline Into 2026

Summary

• Goldman Sachs has delayed its expectations for Fed rate cuts, now pointing to mid and late 2026 rather than early-year easing.

• The revised Fed rate cut timeline reflects continued inflation caution and resilience in parts of the US economy.

• Markets may need to reset assumptions around borrowing costs, liquidity, and equity valuations through 2026.

Goldman Sachs has pushed back its forecast for Fed rate cuts, now expecting two 25-basis-point reductions in June and September 2026. This marks a clear shift from its earlier view that Fed rate cuts would begin as soon as March.

The revised Fed rate cut timeline suggests policymakers remain cautious about declaring victory over inflation. Goldman Sachs appears to believe the Federal Reserve will prioritise economic stability over faster easing.

Markets had increasingly priced in earlier Fed rate cuts following signs of cooling price pressures. This change in the Fed rate cut timeline forces investors to reconsider how long restrictive policy may remain in place.

Higher-for-longer rates continue to influence equity valuations, credit conditions, and currency markets. Delayed Fed rate cuts could maintain pressure on growth stocks and interest-rate-sensitive sectors.

At the same time, a slower pace of Fed rate cuts may reflect underlying economic resilience. Strong labour data and steady consumer demand reduce urgency for aggressive policy shifts.

For fixed income investors, the adjusted Fed rate cut timeline may support yields staying elevated through much of 2026. This environment favours select income strategies while limiting near-term bond price upside.

Goldman Sachs’ outlook reinforces a broader message across Wall Street. Expectations for Fed rate cuts remain fluid, and investors should prepare for policy patience rather than rapid easing.