What is the new expected timing for a rate cut?

Goldman Sachs now expects the first rate cut in 2027, instead of 2026.

How did the jobs data affect Goldman's forecast?

The stronger-than-expected jobs data prompted the bank to delay its forecast, as a strong labor market reduces the need for imminent rate cuts.

Goldman Sachs Pushes Fed Rate Cut Call to 2027 on Strong Jobs Data

Goldman Sachs has pushed back its forecast for the first Federal Reserve interest rate cut to 2027, following stronger-than-expected US jobs data.

June 8, 2026

2 min read

Source: Reuters

Goldman Sachs (NYSE: GS) has delayed its forecast for the first Federal Reserve interest rate cut to 2027, following stronger-than-expected US jobs data, according to a research note published Monday.

Details of the Revision

Goldman Sachs analysts had previously expected the Fed to begin cutting rates in 2026. However, after the May jobs report showed 339,000 jobs added, far exceeding expectations, the bank pushed its forecast to 2027.

Goldman's Rationale

The bank believes the strong labor market gives the Federal Reserve more room to keep rates higher for longer to combat inflation. It noted that inflation remains above the 2% target, reducing the urgency for rate cuts.

Broader Context

The forecast comes as investors await the Federal Open Market Committee (FOMC) meeting in June. While markets still price in some chance of a rate cut in 2024, Goldman's view signals a more hawkish stance.

What It Means for Investors

The delayed rate cut forecast could pressure rate-sensitive stocks like tech and real estate, and may strengthen the US dollar. However, it supports higher net interest margins for banks like Goldman Sachs.

Frequently Asked Questions

Due to strong US jobs data for May, which showed 339,000 jobs added, giving the Fed room to keep rates higher.

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This article was rewritten in Wrqti's editorial style based on information from the original source above. Content is informational only — not investment advice.