Overview
- Citing the May jobs data, Goldman Sachs moved its first expected Fed cut to June 2027 and a second to December 2027, leaving 2026 without any rate reductions.
- Goldman doubled the probability it assigns to the chance of future rate hikes to 20% while keeping its terminal-rate view at 3.0%–3.25%.
- The May payrolls print showed 172,000 jobs added and an unchanged 4.3% unemployment rate, a stronger result that Goldman says undercuts near-term case for easing.
- Markets have pushed back the timing of easing in response and analysts warn that any Fed move above 3.75% would tighten financial conditions and likely pull capital from speculative assets including crypto.
- Goldman pointed to persistent inflation and energy-price shocks as background drivers and said the delay will keep borrowing costs higher for households and reduce funding for startups and speculative markets.