Goldman Sachs now expects the Federal Reserve to begin cutting interest rates as early as September—three months earlier than its previous forecast.
The shift comes as disinflationary pressures have proven stronger than anticipated, and the economic effects of tariffs appear smaller than expected. While the labor market remains healthy, signs of softening—like fewer job openings and slowing wage growth—support the case for easing.
Goldman now sees five rate cuts by mid-2026 and a lower long-term terminal rate of 3.0–3.25%, down from 3.5–3.75%.