Goldman Sachs Delays Fed Rate Cut Forecast to Late 2026, Early 2027 on Inflation
Goldman Sachs revised its forecast for Federal Reserve rate cuts, pushing the next two expected reductions to December 2026 and March 2027. The adjustment stems from higher-than-expected inflation, with core PCE inflation projected to remain near 3% throughout 2026 due to energy cost pass-through. The IMF similarly forecasts core PCE returning to 2% only in early 2027. Goldman economists emphasize that cooler monthly readings and weaker labor data must precede any rate cuts. The FOMC held rates at 3.50%-3.75% in April amid stable conditions, with four dissents—the most since 1992. Analyst Lindsay Rosner warned hawks could dominate the June FOMC meeting, potentially removing the easing bias from statements. For crypto markets, delayed rate cuts tighten liquidity, pressuring risk assets like Bitcoin and Ethereum. The CME FedWatch shows a 93.4% probability of no rate change at the June 17 meeting, with a stronger dollar compressing crypto valuations. Altcoins face heavy selling under tightening liquidity, but Bitcoin's inflation hedge narrative may strengthen if energy-driven inflation persists. Traders await upcoming PCE data and the June 17 FOMC decision for directional cues.
Key facts
- Goldman Sachs delays next Fed rate cuts to Dec 2026 and Mar 2027.
- Core PCE inflation expected near 3% through 2026 due to energy costs.
- CME FedWatch shows 93.4% probability of no rate cut at June 17 meeting.
- Delayed cuts tighten liquidity, pressuring Bitcoin and altcoin valuations.
- Hawkish shift in Fed language could deepen speculative crypto pressure.