Goldman Sachs Sees Fed Holding Rates Until December 2026

TLDR

• Goldman Sachs pushed its forecast for the first Federal Reserve rate cut to December 2026.
• The bank expects a follow-up rate reduction in March 2027 if inflation trends improve.
• Inflation remains at 2.9%, which stands above the Federal Reserve’s 2% target.
• Energy price shocks linked to the Iran conflict continue to pressure consumer prices.
• The US economy added 115,000 jobs in April 2026, which kept wage pressures firm.

Goldman Sachs revised its Federal Reserve rate cut forecast to December 2026 due to steady inflation pressures. The bank expects a follow-up reduction in March 2027 while inflation holds above target levels. Officials also see a 44% chance of a rate hike by April 2027.

Goldman Sachs Revises Fed Outlook as Inflation Holds at 2.9%

Goldman Sachs shifted its baseline forecast for the first Fed rate cut to December 2026. The bank previously expected easing earlier in the cycle. However, inflation data forced analysts to adjust their projections.

Inflation currently stands at 2.9%, which remains above the Fed’s 2% target. Energy price shocks tied to the Iran conflict lifted costs across supply chains. As a result, consumer prices continue to face upward pressure.

The US labor market also showed resilience in April 2026. Employers added 115,000 jobs during the month. That pace kept wage pressures firm and reduced urgency for policy easing.

Fed officials signaled that they will not cut rates during 2026. Policymakers maintained a restrictive stance to address inflation concerns. Their guidance aligns with the Goldman Sachs projection.

Goldman Sachs also assigned a 44% probability to a rate hike by April 2027. Analysts highlighted the risk of renewed tightening if inflation persists. The bank stated that inflation remains the primary policy driver.

Bitcoin and Solana React as High Rates Persist

Bitcoin traded near $80,000 on May 9, 2026. The cryptocurrency held its level despite shifting rate expectations. Market data showed stable pricing during the session.

Solana recorded a 6% gain on the same day. Traders pushed the token higher during active trading hours. The move occurred as broader markets assessed monetary policy signals.

High interest rates reduce liquidity in financial markets. Lower liquidity limits the flow of capital into digital assets. This dynamic influenced crypto markets during the 2022 hiking cycle.

Bitcoin has expanded its institutional presence through spot exchange-traded funds. These products increased access for large investors. Institutional participation provided structural support near the $80K range.

The US dollar strengthened under hawkish Fed positioning. A firm dollar historically creates pressure on dollar-denominated assets. Analysts referenced currency trends in rate projections.

Goldman Sachs maintained its December 2026 rate cut timeline. The bank indicated that future inflation data will guide adjustments. Officials will review upcoming reports before altering policy expectations.

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