Goldman Sachs: Rate Cuts May Not Come Until End of 2026
Goldman Sachs COO John Waldron reiterated the bank's view that the Federal Reserve could begin cutting interest rates by the close of 2026, in an interview with CNBC, sending a clear message that monetary easing is not imminent.
John Waldron, Chief Operating Officer of Goldman Sachs (NYSE: GS), stated in a CNBC interview that the bank expects the Federal Reserve to start cutting interest rates by the end of 2026, diverging from market expectations of earlier cuts.
Shift in Expectations
Goldman Sachs has not changed its official forecast but reaffirmed its view that the Fed will keep rates higher for longer than the market anticipates. The bank's current projection points to the first cut in Q4 2026.
Analyst Rationale
Goldman Sachs believes the U.S. economy remains strong, with inflation still above the 2% target. The labor market is also resilient, giving the Fed room to keep rates elevated to curb inflation without risking a recession.
Context
Waldron's comments come amid growing expectations for rate cuts in 2025, but Goldman Sachs takes a more hawkish stance. The stock (GS) is trading near all-time highs, supported by strong Wall Street performance.
What to Make of It
Goldman Sachs' message is clear: investors should not expect near-term easing. This could support the financial sector in the short run but puts pressure on rate-sensitive assets.
Frequently Asked Questions
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